In a bid to convince investors that the company is now in slow (or maybe not so slow) recovery mode, Sony Corp CEO Kazuo Hirai yesterday announced another raft of changes which will see the focus put on the group’s more profitable businesses, and further restructuring, starting with the spinning off of ‘audio and video’ into a separate wholly-owned subsidiary.

Sony Corp has been surrounded by doom and gloom for years now of course, having lost the lead in numerous strands of the consumer electronics business, traditionally the company’s cash cow. And Hirai has been busy trying to turn around the firm’s fortunes, and get it back into profit, ever since he became CEO in 2012.

Amongst previous decisions well received by investors were selling off the company’s flagging PC unit and then spinning off its struggling television set making division into a separate business. There are some similarities in the new plans, in that Harai seems keen to protect those areas of the business that are doing well from those that are faltering.

Noted as good performers by the Sony CEO are music, gaming and the firm’s imaging technologies, with Harai seemingly keen to invest in further growing these areas of the corporation. Meanwhile Sony’s smartphone and TV manufacturing businesses are not a priority, with Reuters quoting Harai as admitting he could not “rule out considering an exit strategy” in these areas.

According to the Wall Street Journal, the spinning off of the Sony units that make cameras and music players, amongst other things, into a standalone but wholly owned subsidiary will take place later this year. Further spin-offs could then follow, which might ultimately include making the firm’s entertainment business even more autonomous than it already is, something that was previously proposed, of course, by the firm’s vocal (and now former) investor Daniel Loeb.

Though his plan was to spin-off the Sony music and movie business so to float part of it in order to generate new investment. Hirai’s proposals so far seem to suggest Sony will keep complete control of its spun-off entities.

• Sony has signed off on a new Walkman model, the Walkman ZX2. It’s a high-end MP3 player priced at £949, and features a hi-res audio processor to rival Neil Young’s Pono. It will probably go on sale in the spring. And for all the kids who don’t know the history of the Walkman, Pitchfork felt it necessary to print a recap.

• Paul Weller is going to mix up some fuckin next level shit on his forthcoming studio album. It’s “defiantly 21st century”, “progressive in the literal sense of the word” and features a “kazoo [played] through a fuzzbox”, he tells Uncut.

• Oh, what? Another Tame Impala album. Well, OK then. But make sure you clean up afterwards. The band are still working on the record, so there’s time to clear a proper space for it.

• NY hip hop entities Dipset – aka Cam’Ron, Jim Jones, Juelz Santana, and Freekey Zekey – have this week shared their first new single in five years, ‘Have My Money’. Slide over and hear a radio rip of it, right now.

• Jagjaguwar signees Viet Cong have let slip another song from their debut album, which is out on 20 Jan. Slipped right out it did. Someone should really pick it up. Look, there it is.

• Still-dismally-named indie band Pop Etc, fka The Morning Benders, have released the lyric video to their new single ‘Running In Circles’, which is available to buy now. Look, listen and learn the track via said lyric clip right here.

Sony Corp has been secretly considering a sale of its music publishing business Sony/ATV according to Bloomberg, which cites emails leaked as part of the hack attack on Sony Pictures in the US. Emails to and from Michael Lynton, who heads up Sony’s US-based entertainment business in general as well as the group’s film studios, apparently refer to such discussions.

Concerns about the future growth potential of the music publishing sector as it tackles the challenges of digital are expressed from some at Sony Corp HQ in Japan, while complexities in the ownership and governance of the Sony/ATV business are also cited as reasons to cut it loose.

Unlike the Sony Music record company, which is owned by Sony Corp outright, Sony/ATV is a joint venture with the Michael Jackson Estate. Meanwhile half of the business is actually EMI Music Publishing, which Sony/ATV and the MJ Estate co-owns with a number of other shareholders.

From the leaked emails, discussions about the future of Sony/ATV do seem to be in a very early stage, with one exec expressing concern when the topic is included on the agenda for a wider top team meeting, saying all talk about a sale of the group’s music publishing assets are “top secret”. Though not now, of course.

It being the world’s biggest music publisher, there’d almost certainly be quite a bit of interest in Sony/ATV if it was put on the block. And if it became a totally independent entity, that could have some interesting affects on the wider music rights sector.

Sony/ATV chief Marty Bandier is already hitting out at how much money the publishers make from streaming services, and while that is partly about getting the digital service providers to pay more to the music rights community overall, it’s also about altering the way existing streaming revenues are split between the publishers and the labels (the vast majority currently goes to the latter).

While Sony/ATV is in common ownership with the world’s second biggest record company, pressure might be put on Bandier to hold back from all out war with the DSPs and labels, certainly this side of Spotify’s flotation, from which Sony Music will earn big time as a result of its minority stake in the streaming firm. But an independent Sony/ATV might be more willing to green light a nuclear attack on a streaming sector many songwriters and publishers reckon has been structured to benefit DSPs and labels at their expense.

As expected, Sony Corp last week confirmed another disappointing quarter, with the entertainment and consumer electronics group running up a net loss of $1.2 billion, or around 135 billion yen.

Which ain’t great, though Sony having previously warned that recent months had been particularly doomy and gloomy at the conglom, the figures were actually slightly better than some analysts expected.

The mega-losses in the summer quarter explain why Sony was forced to admit back in September that its year-end losses were set to be four times bigger than originally expected, topping $2 billion.

Most of the company’s current woes stem from its mobile phone business, which is nice, because in recent years it’s been mainly the Sony television set division that caused all the doom and gloom, and it’s good to have a bit of variety.

Compared to some of its electronics divisions, the US-headquartered Sony entertainment firms – including Sony Music and Sony/ATV – are doing pretty well, though PlayStation is perhaps the real Sony cash cow subsidising everything else.

Noisy Sony Corp shareholder Daniel Loeb has divested his stock in the electronics and entertainment group, which will probably please the top guard at the Japanese conglom.

As previously reported, Loeb of investment vehicle Third Point was very vocal about the changes he felt were needed at the flagging Sony business. Most notably he proposed spinning off the US-headquartered Sony entertainment divisions and selling a slice of that company to third-party investors, forcing the firm’s movie, TV and music companies to report their finances in more detail, and ultimately paving the way for Sony to sell its main entertainment assets entirely.

The Sony leadership in Tokyo didn’t like that proposal at all, though were forced to consider Loeb’s suggestions in some detail. Ultimately the entertainment spin-off plan was rejected, though some significant changes have been made elsewhere at the Corp, especially on the consumer electronics side where the firm has been struggling the most.

In a letter to investors, as reported by Deadline, in which he confirmed the divestment of the Sony shares, Loeb did give Sony Corp boss Kazuo Hirai some credit for making tough cutback decisions, but said “still, they have a long way to go and we continue to believe that more urgency will be necessary to definitively turn around the company’s fortunes”.

Nevertheless, Loeb says Third Point will “generate a return of nearly 20 percent on [the Sony] investment before exiting”.

Sony Corp has done some maths this week and worked out that the group is likely to make a loss of just over $2 billion this financial year, rather than it’s previous estimate of just under $0.5 billion. Which is quite a big difference, really, isn’t it? Even before you convert the figures into yen.

Sony, of course, has been struggling for years now, a temporary uplift in 2012/3 proving shortlived. It’s the consumer electronics side of the business causing the problems rather than the movie studios and music companies, with doom and gloom in the firm’s mobile division behind the revised loss predictions announced today. It’s because all you kids keep purchasing super-cool Apple and Samsung smartphones, rather than buying a cassette walkman from the 80s and just pretending to check your email on it. Which would probably be as productive.

Sony Corp CEO Kazuo Hirai has already been offloading less lucrative units and expensive property assets in a bid to turn the company’s fortunes around. Remains to be seen if talk of selling a slice of the conglom’s US-headquartered entertainment division slips back onto the agenda given continued challenges at the company.

Confirming the issues in their mobile phone business, Sony top guard said today that its latest revival plan had already been “modified to address the significant change in the market and competitive environment of the mobile business”.

Entertainment congloms like Sony have had their online networks targeted by so called Distributed Denial Of Service attacks before, though usually such initiatives are led by anti-copyright or anti-capitalist campaigners, not groups claiming allegiance to jihadist fighters.

Sony’s PlayStation and Entertainment Network, which includes the firm’s streaming music service, went offline this weekend after a DDoS attack swamped the company’s servers. Though unlike the infamous attack on Sony’s networks in 2011, this time no data was grabbed during the DDoS.

The source of the server attack is not certain, though a Twitter feed using the handle @LizardSquad claimed responsibility.

Initially the Twitter account said the attack had been instigated because Sony wasn’t spending enough of the income generated from the PlayStation Network on enhancing the service. But then it later tweeted “today we planted the ISIS flag on @Sony’s servers”, alongside a photo of a man carrying the flag of the Islamic State movement (known until recently as the Islamic State Of Iraq And Syria, aka ISIS).

The DDoS coincided with drama in the US after a plane carrying the President of Sony Online Entertainment, John Smedley, was diverted after bomb threats were made online, including on the @LizardSquad Twitter feed. American Airlines Flight 362, flying from Dallas to San Diego, was redirected to Phoenix as a result of the bomb threat.

Smedley later tweeted: “Yes. My plane was diverted. Not going to discuss more than that. Justice will find these guys”.

It’s hard to know whether @LizardSquad really does represent the group behind this weekend’s DDoS attacks; Microsoft’s Xbox network was also reportedly targeted. It’s also not clear whether the feed really does have any formal or informal links to ISIS. Though the online manifestations of the current conflict in Iraq and Syria have been notable of course, both those that have been shocking, and those that are more mundane.

With that in mind the now defunct post-metal band also called ISIS have been forced to rename their Facebook profile to Isis The Band, after some confused web surfers started posting angry messages on it. The band split in 2010, but kept the Facebook profile to update fans on band members’ other projects.

The outfit’s former drummer Aaron Harris, speaking to ABC News about people getting his ex-band confused with the ISIS that is dominating headlines this year, said: “It certainly caught us off guard. Fans have emailed us that they’re reluctant to wear our t-shirts now and we’ve also gotten some off-colour comments”.

Remember that time when Sony’s PlayStation Network was hacked in a major way? Remember? Go on, that time. Yeah, that’s right, that time.

Anyway, the hack that forced the PSN and Sony’s streaming music platform offline, as hackers helped themselves to the personal information of the service’s customers, occurred back in 2011. But litigation relating to the downtime data grab – which didn’t include credit card numbers – is ongoing.

And last week Sony proposed a $15 million settlement to the class action lawsuit that emerged from the various bits of litigation against Sony over the hack.

According to The Register, the firm will mainly compensate affected customers with freebies, including a free game from a list of fourteen, three months of the PlayStation Plus service gratis and, for those locked out of what is now Music Unlimited during the hack, a month’s free membership. Though those who can prove that personal information such as passwords was stolen during the hacking may also be eligible for a cash payment of up to $2500.

There will be some limits on how many people can claim the freebies and cash, and perhaps most importantly Sony will not specifically accept any responsibility for the collapse of their gaming and entertainment network, presumably to prevent any further litigation being pursued citing this settlement as precedent.

A US judge will now have to approve the proposed settlement before any customers who qualify under the terms of the original class action can claim their free stuff.

You might have thought sport was all about biking now, but no, that football kicking festival in Brazil is still going through the final motions, and Indian TV company Multi Screen Media, a Sony subsidiary, is really keen that fans of the game in India watch the remaining games via its channels, and not through dodgy streaming or download sites.

And to that end it recently secured a mega-web-block injunction in the Indian courts forcing internet service providers in the country to block no less than 219 websites. Though the original legal filing last month reportedly listed 479 offending online services.

Multi Screen Media secured the rights off World Cup maker FIFA to broadcast the competition in a number of countries, including Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. Though, of course, footage is also available online from a plethora of unauthorised sources.

In its legal filing the TV firm said that these online platforms were involved in copyright infringement which was costing the company revenue, and also potentially depriving the government of the taxes paid on television subscription fees.

With time of the essence for Multi Screen Media to capitalise on its rights to air the World Cup, the broadcaster’s lawyers added that it was tricky to target the offending websites with litigation directly, and therefore web-blocks – court orders forcing ISPs to block access to infringing sites, which, of course, have now been employed in various jurisdictions – were the best way forward.

The judge hearing the case concurred on this point, writing in his ruling: “Learned counsel for the plaintiff submits that many of the websites [in the list] are anonymous in nature and it is virtually impossible to locate the owners of such websites or contact details of such owners. It is further submitted that many of these rogue websites also hide behind domain privacy services offered by various domain name registrars”.

And so the blockade was ordered. Now, web-blocks have become a common tool employed by rights owners in their fight against online piracy in a number countries, not least the UK. And it’s quite common for web-block applications to list a number of websites which content firms believe primarily exists to enable and encourage copyright infringement. Though one court order blocking 219 sites in one go is quite phenomenal.

The ruling also arguably makes already controversial web-blocking even more so. Certainly the original list of offending sites provided by Multi Screen Media stood out in that, alongside the usual suspects like The Pirate Bay, it included a few services owned by Google, as well as Kim Dotcom’s file-transfer firm Mega (the replacement to MegaUpload, which has generally caused less outrage in copyright circles than its predecessor).

The downsized list had the Google-owned set-ups removed, though it’s not clear if Mega is still amongst the platforms to be blocked in the region. It’s thought the list of targeted sites was prepared for Multi Screen Media by a local anti-piracy firm called Markscan which TorrentFreak has already accused of sending “erroneous takedown notices” relating to Google services.

The company told the file-sharing news site that it had both automated and staff-led checks in place to ensure its takedowns don’t target legit websites. Though if the anti-piracy agency is prone to order notices against non-infringing sites, that can affect the credibility of everyone involved in the takedown and web-block game.

Sony Corp top man Kazuo Hirai was given a rough ride at the electronics and entertainment giant’s Annual General Meeting earlier today, with some investors openly heckling the CEO, though shareholders nevertheless backed the senior management team and their current plans for moving the company back into profit.

Sony Corp has been struggling for a number of years now, with the electronics side of the business performing particularly badly. A temporary return to profit in 2012/3 was followed by more losses in the financial year just gone, and the company is expected to make a loss this financial year too. But beyond that, profits will return Hirai said today.

Noting Sony’s heritage, according to the Associated Press, the CEO told his investor audience: “The best way to build our future is for Sony to remain Sony, and realise our motto to become a company that inspires and fulfils your curiosity”.

As previously reported, Sony has already sold off its laptop business and is spinning its television division (the bit that makes TV sets, rather than programmes) into a separate company. Though Hirai confirmed again at the AGM, in response to a shareholder question, that selling off some or all of Sony’s US-based entertainment business, which includes the Sony music firms, is not on the agenda, despite the previously reported claims by American investor Daniel Loeb that that would be good move.

Football players at the World Cup have reportedly been banned from using Beats headphones, due to an agreement between FIFA and one of its sponsors, Sony.

Players were apparently sent free pairs of Sony headphones ahead of the tournament, though few have been seen using them. Beats, meanwhile, also gave free headphones to key players, which have proven more popular. However, FIFA have banned any players from wearing Beats accessories when inside stadiums for matches or at other official events, according to Reuters.

This follows a similar move by Beats at the 2012 Olympics, where many athletes were given the distinctive headgear and often seen using it, despite rival Panasonic’s official sponsorship of the event.

Sony Corp has announced an expansion of duties for Nicole Seligman, who will become president of the conglom’s US-based Sony Entertainment division, which includes the firm’s two main music businesses, the Sony Music record company and the Sony/ATV music publishing powerhouse.

Seligman will retain her job as president of Sony Entertainment’s direct parent in the Sony hierarchy, Sony Corporation Of America, and will continue to have an albeit streamlined legal advisory role with the company, but will also have much more involvement in “developing overall strategy and growth opportunities, identifying and implementing efficiencies within and among the three Sony Entertainment companies, and expanding the businesses’ combined global footprint and influence”.

She will work alongside Sony Entertainment CEO Michael Lynton in her new job. He told reporters this weekend: “I sought out Nicole for this role and am thrilled to work with her to explore new ways to leverage Sony Entertainment’s business and creative assets into new opportunities for profitability and growth”.

Although Sony Corp’s much documented financial woes are in the main the result of problems in the Japanese firm’s consumer electronics businesses, there has been pressure on Sony Entertainment to save costs and perform better too, especially on the movie and TV production side.

Pressure has arguably increased since shareholder Daniel Loeb called for Sony Entertainment to be spun off and partly floated, forcing more financial accountability onto the film studios and music companies. While Loeb’s demands were knocked back, it has arguably resulted in the Sony entertainment firms being more heavily scrutinised.

Sony Corp’s net loss for the year ending 31 Mar was announced yesterday as ¥128.4 billion (£752 million), in line with the revised profit warning issued earlier this month and around three times the ¥41.5 billion (£243 million) loss the entertainment and electronics giant made last year. The company predicted further losses this year too, as it restructures and sells off unprofitable businesses.

Much of these losses came at the end of the year, as quarterly losses rose to ¥138.2 billion (£810 million), mainly due to costs resulting from the sale of the corporation’s PC business. Looking forward, the company predicts sales across the group will be flat this year, though without the big one-off costs of the last twelve months, the company should return to a ¥50 billion loss for the year to 31 Mar 2015.

On the plus side though, Sony’s music businesses are doing quite well, with revenues up 13.9% year-on-year to ¥503.3 billion (£2.95 billion). Though this was largely due to currency fluctuations (as money moves from Sony Music’s US base through to the Japanese parent company), with recorded music sales actually declining, despite some offset from an increase in digital income. Sony Music’s top selling artists of 2013/4 included One Direction, Daft Punk, Beyonce and Miley Cyrus.

On the publishing side, Sony/ATV’s EMI Music Publishing subsidiary was cited as the main source of a 34.9% increase in overall operating income (though again, currency fluctuations played a role here).

Sony Corp warned yesterday that its losses for the last financial year are likely to be higher than previously predicted, at $1.27 billion.

As previously reported, Sony announced in February that it expected to make a loss of $1.1 billion (£651 million), adding that it would sell its PC business and cut 5000 consumer electronics jobs to help make up the shortfall. It also appointed a new CFO in light of the losses.

But the doom and gloom continued yesterday, when Sony admitted that it was now expecting the final loss figure to come out closer to $1.27 billion (£752 million).

However, as previously reported, on the music side things are looking brighter, with revenues and profits for the final quarter of 2013 up year-on-year.

The full financial report for Sony Corp’s year up to 31 Mar will be published on 14 May.

Sony Corp announced on Friday that it will replace its Chief Financial Officer tomorrow, with Kenichiro Yoshida taking over from Masaru Kato.

After a little bit of optimism in 2012, the Japanese conglom will report substantial losses for its current financial year, which ends today. As previously reported, Sony’s US-based entertainment businesses – including Sony Music and the Sony/ATV publishing company- have been doing alright, and most of the financial woes stem from the electronics side of the group.

More cost cutting will likely be needed across Sony Corp, and Yoshida, previously Deputy CFO, will be charged with the task of finding additional savings. Kato, meanwhile, will become Vice-Chairman of the Sony group.

While Sony Corp at large continues to struggle, the conglom’s music businesses are doing alright, with revenues in the last quarter of 2013 across the music division – which includes the Sony record company, Sony/ATV publishing firm and its music businesses in Japan – up 14.4% year-on-year, resulting in an operating profit rise of 32.5%. In cash terms that’s $1.38 billion in revenue and about $207 million in profit.

Global releases from One Direction, Beyoncé and Miley Cyrus all helped, with Sony top guard also noting the continued rise of digital revenues. Record sales in Japan, however, were down a little year-on-year, though that was blamed on a light release schedule compared to late 2012. For the current financial year, which ends on 31 Mar, both revenues and operating profits are also up within Sony’s music division.

Despite a temporary bout of optimism last year, more doom and gloom at Sony Corp, which has just announced that it expects make a loss of £665 million for the financial year due to end on 31 Mar. Which is no fun at all.

It’s still the electronics side of the Sony business that is causing most of the woe, and while its smartphones division has seen a sales uplift, its PC and TV units are still struggling. Indeed the former is to be sold off, while restructuring that will cut 5000 jobs on the consumer electronics side of the business is also expected.

By comparison, the conglom’s US-based global entertainment businesses are doing alright. Though rumours remain that bidders are still on the sidelines interested in acquiring some or all of the Sony music, TV and movie companies. Sony Corp HQ has always denied it has any interest in selling its non-Japanese entertainment assets to shore up its electronics business, and indeed even knocked back a suggestion it sell-off a slice of that side of the Corp through a US-based flotation, a proposition made by mouthy shareholder Dan Loeb.

Media firm Tribune announced yesterday that its $170 million acquisition of Gracenote from Sony Corporation of America had been completed.

As previously reported, the deal will bring music metadata firm Gracenote together with its new owner’s existing TV data company Tribune Media Services, giving that business a presence in the download and streaming sectors for which Gracenote is a key provider of music data.

Announcing the deal completion, President of Tribune Digital Ventures Shashi Seth told CMU: “The acquisition of Gracenote is a natural extension of our current portfolio. This reinforces Tribune’s commitment to investing in cutting edge technologies that will shape the way consumers interact with digital media now and in the future”.

Gracenote President Stephen White added: “I am inspired by Tribune’s vision of digital entertainment and the role Gracenote can play in making it a reality. The acquisition by Tribune just makes sense. We see great opportunities to leverage Gracenote’s technologies, data and expertise with Tribune’s core media business to create more dynamic entertainment experiences”.

Sony also confirmed its previous estimate that the sale of Gracenote would provide it with an additional $60 million in operating income come the end of the company’s fiscal year on 31 Mar, beyond the original forecast it published in October last year.

With all the streaming music chatter this week likely to centre on the launch Stateside of the new Beats Music flim flam, perhaps let’s spend 48 seconds reminding ourselves that Sony Corp also operates a streaming platform.

Remember that? Go on, you know. Music UnLimited on the Sony Entertainment Network. They called it Qriocity for about a week. Coming back to you now? No. Oh well, they did and they do and you should remember that. Because PlayStation gamers like music too, you know.

Anyway, the Sony streaming service last week announced an alliance with Bandsintown, the gig listings app that’s a tiny little bit (aka exactly) like Songkick. Under the deal Bandsintown users will be able to listen to previews of tracks from artists playing gigs in their locale in the very near future at the mere tap of a screen. They’ll get full track previews for a few weeks, and then 30 second clips unless they want to sign up for Music Unlimited’s full service at a mere ten dollars a month.

Media firm Tribune has purchase music metadata company Gracenote outright from the Sony Corporation Of America for $170 million, it has been announced.

Gracenote is the largest provider of music data in the world, currently holding information on over 180 million tracks and videos, which it provides to services such as iTunes, Spotify, Amazon, Xbox Music and various net-connected car dashboards. It also provides movie and TV show information for listings in over 30 countries, and overall its database is accessed over sixteen billion times a month. Under the deal, the company will merge with Tribune’s existing metadata company, Tribune Media Services.

Announcing the deal, President of Tribune Digital Ventures Shashi Set said: “Gracenote and TMS are an ideal fit. Both companies have substantial digital footprints and are well-respected leaders in their areas globally. Together we will become an even greater force in the global entertainment data business by servicing new and existing customers with better data, new products, and new services to help an evolving entertainment industry”.

Gracenote President Stephen White added: “Given the breadth of the Tribune Company and its commitment to revolutionising digital media, I firmly believe that we have found the right home to grow our business and realise Gracenote’s long-term vision. The marriage of these world-class music and video data platforms, from TMS and Gracenote, will help us reimagine how people discover and connect with music, movies and TV shows across all devices”.

The deal is expected to be completed in the first quarter of 2014, pending regulator approvals. If all goes ahead as planned, Sony said in a statement that it expected to record a gain of $60 million in operating income, above its earlier forecast for the year to 31 Mar.

This follows a cut in advertising spend and the firing of the Marketing Director at Sony Pictures earlier this year, in turn following disappointing box office takings on a number of films. In addition to its movie studios, Sony Entertainment also encompasses the corporation’s television and videogames businesses, and music firms Sony Music and Sony/ATV.

Management consulting outfit Bain & Company has reportedly been brought in to oversee the cost cutting exercise. A spokesperson for Sony told NYT: “As part of a nearly four-year process of increasing financial discipline, Sony Pictures is conducting a review of its business to identify further efficiencies. Our object is, and always has been, to operate an efficient studio that is uniquely positioned to capitalise on further growth opportunities”.

This move follows the previously reported proposal by investor Daniel Loeb that Sony sell off 20% of its entertainment business in a stock market float that would also force the entertainment companies to become more transparent to investors. Loeb’s Third Point hedge fund is now a significant Sony shareholder, controlling just under 7% of its stock, so the suggestion was taken serious by the Corp’s senior management.

However, in August CEO Kazuo Hirai said in a letter to Loeb: “Sony’s entertainment businesses are critical to our corporate strategy and will be important drivers of growth. I am firmly committed to assuring their growth, to improving their profitability, and to aggressively leveraging their collaboration with our electronics and service businesses”.

At the time Loeb said he was “disappointed” with the decision, and would “explore further options to create value for Sony shareholders”. It’s not clear if bringing in Bain & Company is in anyway a response to Loeb putting pressure on management, or if it has further implications for other Sony entertainment divisions beyond film.

Certainly talk of cutbacks at the Sony film company has led to rampant speculation that similar cuts might be planned for the Sony Music record company and Sony/ATV music publisher, though nothing in the New York Times report suggests that is on the agenda. And Sony Music’s big release of the year, next week’s One Direction album, is unlikely to bomb like ‘White House Down’.

I mean, the One Direction boys are trying their best to keep Sony Corp afloat with their world domination strategy, but if the entertainment conglom’s film division will insist on releasing shit action movies about attacks on the White House, well even Harry Styles can’t carry that disaster.

So yes, Sony Corp yesterday confirmed it had made just under a $200 million loss for the last quarter, which is a shame because – after several years of woe – the more recent narrative at the Japanese entertainment and electronics firm had been more positive. The company still expects to make a profit this year, but revised its expectations downwards, from 50 billion yen to 30 billion.

The consumer electronics side of Sony, behind most of the firm’s recent problems, continues to struggle, meanwhile Sony Pictures posted an overall loss this quarter, in no small part because of the lacklustre performance of the studio’s big summer blockbuster, mediocre action flick ‘White House Down’.

Earnings at the Sony music companies – principally the Sony Music record company and Sony/ATV music publishing business – were pretty much on par with the same period a year ago, though in the wider picture are performing well for the conglom.

Sony Corp chief Kazuo Hirai has told the Wall Street Journal that the recent call by activist shareholder Dan Loeb for the Japanese conglom to sell off a slice of its American entertainment business was “actually a good thing”, even though the company’s board ultimately rejected the proposal.

As previously reported, Loeb’s Third Point company has been quietly increasing its stake in Sony Corp, and proposed that the firm float part of the Sony entertainment group, which includes the firm’s non-Japanese movie, TV and music companies, partly to raise funds to help the flagging Sony electronics business, and partly to force the entertainment division to be more open to investors (because it would be directly listed).

Although the Sony Corp top guard have always denied speculation that they might sell their film studios and music companies in the past, they did formally consider Loeb’s proposal before knocking it back. Hirai insists that, despite rejecting Loeb’s plan, he has a good relationship with his shareholder, telling the Journal: “I have a fairly good relationship with the folks from Third Point, including Dan”.

The Sony boss also conceded that “Dan and Third Point shed a light on the entertainment properties that we’ve been trying to shed a light on for the longest time”. Hirai said that profit margins at Sony’s entertainment business should be higher, that the Sony entertainment companies – including Sony Music and Sony/ATV – should be more transparent, and the Sony film studio should refine its movie greenlighting process.

It remains to be seen if those issues are now dealt with, though the wider Sony business is performing better of late, which could reduce shareholder pressure on management in the immediate future.

01: Ticketmaster President Nathan Hubbard was reported to be leaving the Live Nation-owned firm. It’s thought that the decision to ease out Hubbard, who has been a Live Nation exec since 2006 and head of Ticketmaster since 2010, was due to bosses feeling that the ticketing firm needed someone with more of a tech background at the top. Ticketmaster’s top man in North America, Jared Smith, it to move into the President role, at least in the interim. CMU report | Wall Street Journal report

02: Live firm MAMA & Company confirmed CEO Dean James was on “leave” and Chairman Richard Thompson was overseeing the running of the business. Although the reason for the switch isn’t currently clear, MAMA owners Lloyds Development Capital strongly refuted rumours that it had pushed James aside at the company he co-founded in 2005, and which he successfully led through the HMV acquisition and subsequent LDC-backed management buy-out. CMU report

03: Live Nation boss Michael Rapino sold a third of his shares in the company. The sale reportedly netted Rapino, who signed a new five year contract with the company last year, around $11.7 million, he choosing to sell as the shares hit a 52 week high. Live Nation said that the sale was for “estate-planning purposes”. CMU report | Bloomberg report

04: Sony withdrew its sponsorship of the Sony Awards after 32 years. The radio industry’s most prestigious award ceremony will for the time being be called The Radio Academy Awards while a new sponsor is found. On its decision to pull out of the ceremony, Sony said that it was now time for Sony to move on and focus on other areas of the business”. CMU report | Radio Today report

05: The Pirate Bay celebrated its tenth birthday. Despite continued attempts to shut it down, block access to it, seize its domains, imprison and fine those involved with it, The Pirate Bay remains firmly online. To mark the occasion, the site’s current operators held a party in Stockholm last weekend and launched a new web-block avoiding browser. CMU report | The Local report

In our features section this week, we interviewed the wonderful Julia Holter, and got two excellent playlists from Ghostpoet and The Axis Of Awesome’s Benny Davis.

Well, this is awkward. Sony has withdrawn its sponsorship of the Sony Awards after 32 years. So this is probably a good time to remind you that the UK radio industry’s big annual bash is actually called the Sony Radio Academy Awards. You never won a “Sony” my friend, that there is an “Academy”, OK?

The Radio Academy has announced that its annual awards ceremony will go by the name of The Radio Academy Awards for the time being, but promises to announce a new sponsor in the near future. So that’s fun.

Current Chairman of the Radio Academy, Ben Cooper said: “The Radio Academy would like to thank Sony for their magnificent 32 year support of what has become the UK’s gold standard radio awards. The Radio Academy Awards will continue to celebrate the very best of the UK radio industry, but the media landscape has changed radically from when the awards first launched in the 1980s offering the Academy great potential for some exciting new partnerships and ideas”.

Sony UK & Ireland’s Chris Bowen added: “Sony has enjoyed a long and successful partnership with the Radio Academy Awards for over 30 years, achieving huge recognition and respect within the British radio industry during that period. The awards ceremony itself has become an outstanding event showcasing the best radio talent on the air. It is now time for Sony to move on and focus on other areas of the business. We wish The Radio Academy every success and we are delighted to have played our part in making these awards the most credible radio awards, not only in the UK, but worldwide”.

So that’s all very positively spun. The Sony Radio Academy Awards launched in 1983 and has grown to become one of radio’s most prestigious awards ceremonies – even if commercial radio types can often be heard to gripe “well, if we had their budgets” when yet another BBC bod picks up a prize. BBC Radio 4 has been particularly successful over the awards’ history, picking up almost 200 since 1983, over a hundred more than its nearest competitor, BBC Radio 1.

01: Sony Corp knocked back Daniel Loeb’s proposal to partially sell off the company’s entertainment division. Earlier this year, Loeb’s Third Point hedge fund became a significant shareholder in the Japanese entertainment and electronics conglom, and promptly began suggesting it sell off part of its entertainment business. The Sony top guard said it was giving the proposal serious consideration, but this week formally knocked back Loeb’s plan with a letter from CEO Kazuo Hirai. CMU report | Kazuo Hirai’s letter

02: Grooveshark signed a licensing deal with EMI Music Publishing, meaning it now has one major music company deal in place. The Verge reported earlier this week that the streaming firm was close to settling its ongoing legal dispute with EMI Music Publishing and to signing a new licensing agreement. And yesterday that’s exactly what happened. Announcing the news, Grooveshark CEO Sam Tarantino said: “We’re excited with this. Grooveshark is taking the same steps YouTube did in its early evolution from a startup to becoming a core part of a content creator’s social distribution and marketing mix”. CMU report | The Verge report

03: Google launched its streaming service in the UK. Having launched in the US and Australia earlier this year, Google’s lengthily named streaming service Google Play All Access Music finally made it to the UK (along with Austria, Belgium, France, Ireland, Italy, Luxembourg, Portugal and Spain). It’ll set you back £9.99 per month, or £7.99 if you sign up by 15 Sep. CMU report | Music Ally report

04: Warner Music Group and Live Nation were both upbeat about their finances. Though Live Nation perhaps with more reason. The live firm said it had seen revenues 8.3% year-on-year in the last quarter. Warner Music Group, meanwhile, had seen revenues increase by 1.8% in the same period, but losses had almost doubled to $63 million. Live Nation report | Warner report

05: HMV confirmed it was moving back into its original store. The very first His Master’s Voice shop opened on Oxford Street in London in 1922, and remained in the same unit until 2000. Having given up the lease on its larger Oxford Street store near by to Sports Direct earlier this year, new HMV owner Hilco confirmed the return this week. CMU report | Photos of the original shop

Thank you for your letters. We welcome the opportunity to exchange views with our shareholders, and we appreciate that you have shared your perspectives. We agree with the statement in your May 14, 2013 letter that Sony has “one of the most prestigious entertainment businesses in the world.” Your investment in Sony has increased the market’s focus on our entertainment businesses, which we welcome.

Since your first letter on May 14, 2013, the Board of Directors and management team, with the assistance of external financial and legal advisors, have thoroughly considered the merits of your proposal for a rights or public offering of 15-20 percent of our entertainment businesses. Our external financial advisors have met with you and heard your views in more detail. While we share with you the objectives of increasing profitability and driving shareholder value, after careful review, the Sony Board of Directors has unanimously concluded that continuing to own 100% of our entertainment business is the best path forward and is integral to Sony’s strategy. We do, however, expect to increase disclosure regarding Sony’s entertainment businesses. We agree this can help market participants analyze their performance and monitor their success.

I have been a part of the Sony family for nearly 30 years, the last year being my first as CEO. I have witnessed Sony’s long history of innovation and our passion to create groundbreaking products, content and services that inspire and excite our customers all over the world. During my tenure as CEO, we have made many changes, and we are encouraged by our progress and the opportunities ahead as we continue to execute on our One Sony strategy. Our strategy includes a commitment to:

Further strengthen profitability in the entertainment businesses. Sony Pictures and Sony Music are critical elements of our strategy and fundamental drivers of Sony’s growth for the future. We expect that our strategy will result in strong growth and increasing profitability through investing in high-growth, high-margin businesses, particularly in television production and international networks.

In the Pictures business, we are aggressively investing in our global television production business, with 32 new and returning TV series on air in the US this year, including 15 new series in 2013-2014, the most ever for Sony. We continue to invest in our attractive, high-growth worldwide networks business. Indeed, we have grown revenue in our worldwide networks business from approximately $600 million in the fiscal year ended March 31, 2008 to $1.5 billion in the fiscal year ended March 31, 2013. We are also building upon our diversified film slate strategy, and expect to continue to explore the use of slate financing when it is advantageous to us.

We are very focused on increasing margins at Pictures, including through the growth initiatives described above, and by reducing costs. While we believe our theatrical marketing costs have been and continue to be in line with our competitors, and that our margins are generally comparable to some other major studios, we recognize that our margins should be higher. In the year since I became CEO, we have driven growth and profitability in our entertainment businesses, and during that time we have taken additional steps to tighten controls and reduce costs. For example, in the past year we have undertaken a rigorous cost savings initiative, including structural changes, that we expect to generate significant annual savings at Pictures over the next few years. We have also instituted an even more exacting “green light” process for film production, focusing more intensively on overall slate profitability as well as per film returns-on-investment.

Our Music business continues to be profitable with marginswe believe aregenerally in line with peers. We are nurturing and developing new talent, exploiting our vast catalog and copyrights, and exploring other growth opportunities, including leveraging our vast music content for use with increasingly popular digital music service platforms. We continue to seek cost reductions and pursue operating efficiencies.

Finally, our executive compensation arrangements at Pictures and Music are tied to the performance of their business. We believe this aligns incentives for the executive management teams at Pictures and Music, specifically by linking compensation to financial performance.

Pictures and Music are critical to Sony’s corporate strategy and will be essential drivers of our future growth. Many of your observations regarding our entertainment businesses, and in particular Pictures, are not consistent with the businesses I know. I am personally involved in the oversight of these businesses and firmly committed to assuring their growth, to improving their profitability, and to aggressively leveraging their collaboration with our electronics and service businesses.

Revitalize our electronics business. While the industry environment for our electronics business remains challenging, we have made significant progress over the past year, and we are confident that we are on the right path. We have accelerated structural reforms through our global business operations, as well as portfolio realignment, including divestiture from non-strategic businesses, and allocating capital to areas of focus. We have also released powerful new products that appeal to consumers globally. As you mentioned in your recent investor letter, our Xperia series smartphones have been very well received in Japan and Europe, and this momentum is expanding internationally, while our Cyber-shot RX1 won the prestigious Camera Grand Prix 2013 as the best new camera in Japan. We are also encouraged by the positive feedback from the announcement of the PlayStation 4, which is highly integrated with our leading networks and mobile businesses. The transformation of our television business has been progressing as planned. We are investing in Mobile, Imaging and Game, and these business units are inextricably linked to our One Sony strategy.

Continue financial services’ steady contribution. We expect the financial services business to continue to deliver highly dependable financial products and services, and maintain its high customer satisfaction ratings. Through these efforts, the business is expected to achieve stable and growing profitability and reinforce the power of the Sony brand.

Achieve our growth and profitability goals. We believe that a continued focus on steady execution will allow us to achieve the financial targets we set at the beginning of fiscal year 2012. Specifically, for fiscal year 2014 (ending March 31, 2015), we are targeting consolidated sales and operating revenue of ¥8.5 trillion, an operating margin of more than 5% and a return on equity of 10%. For the electronics business, for fiscal year 2014 we continue to target sales and operating revenue of ¥6.0 trillion and an operating margin of 5%.

The Board and management team strongly believe that continuing to own 100% of our entertainment business is fundamental to Sony’s success and that neither a subscription rights offering nor a public offering is consistent with our strategy for many reasons. These include:

Demand for content is increasing its value in a dynamic industry environment, and we believe our entertainment businesses will increasingly benefit from these trends. We are in an extraordinary industry environment, where we believe the emergence of new distribution platforms, the proliferation of powerful mobile devices, and near-ubiquitous broadband access will continue to spur increasing demand for premium content at unprecedented levels. We believe Sony is well-positioned to drive value from our global content assets in this exciting environment and, thus, we believe our shareholders will benefit from owning all, rather than a part, of these valuable assets.

Full control of our entertainment businesses drives internal collaboration, facilitates synergies, and allows us to be more nimble. Content, technology, and consumer and professional products are rapidly converging, not diverging, and we therefore expect the interplay between our entertainment and electronics businesses only to increase in size and form over the coming years and to help drive the growth of Sony’s electronics business. We observe this trend in many of our businesses, and especially in our Mobile business, where a rapidly changing landscape demands flexibility, timely decision-making and speedy execution. We also see this in the increasingly strong linkage between Sony Pictures and our Professional Solutions Group within our electronics business, in particular in focus areas such as 4K television, professional equipment, and digital production systems. These are only examples. We believe the many opportunities for collaboration in this regard are only increasing, and a rights or public offering would put obstacles in our strategic path, creating the need for otherwise unnecessary and burdensome arm’s length intercompany relationships and for consideration of minority shareholder rights, thereby limiting our control and strategic flexibility.

There are alternative sources of capital available, should Sony require it. We believe Sony has adequate capital resources to fund our business plans. Our entertainment businesses have used their cash flow to fund and invest in their businesses, and their cash flow has not been utilized to fund other businesses. Should management determine that Sony requires additional capital, there are more efficient sources available to raise the approximately $2 billion of capital you have suggested raising through a rights or public offering. Should we require capital, or in the event of unanticipated events, our priority would be to raise it without selling a portion of an asset fundamental to our growth strategy, and without unnecessarily burdening Sony’s ability to execute our business strategy for both entertainment and electronics.

We can achieve increased disclosure regarding Sony’s entertainment businesses without a rights or public offering. We agree with you, other shareholders and a number of analysts that there may be advantages to providing more disclosure about our entertainment businesses, but we believe a rights or public offering is not required to provide such disclosure.We believe that providing additional disclosures will help investors better analyze the performance of these businesses.Starting in the second fiscal quarter of this year, we expect to include quarterly revenue figures for certain categories within the Pictures and Music segments, as well as certain other metrics. We also expect to include, on a quarterly basis, necessary information to enable investors to calculate adjusted earnings before interest, taxes, depreciation and amortization for each segment, including Pictures and Music. Finally, we plan to host regular meetingswith our entertainment management team to assist investors and other market participants to improve their understanding and knowledge of our entertainment businesses.

Sony’s Board and management team fully understand that the industries in which Sony operates are challenging, fast moving and competitive, and as a result we are very focused on avoiding obstacles that may hamper alignment among our businesses. We believe Sony is already changing for the better, and we are encouraged by the opportunities that lie ahead as we aggressively pursue our One Sony strategy. We remain committed to pursuing sustained growth in profitability and shareholder value, so that we can meet and exceed the expectations of all of our stakeholders.

We thank you for your commitment to Sony and will continue to give full consideration to any constructive feedback from our valued shareholders. We look forward to maintaining a productive relationship with you and welcome an ongoing dialogue.

As expected, Sony Corp has rejected proposals from one of its shareholders to sell off a slice of its US-headquartered entertainment business, to generate cash to help fund the revival of the Japanese conglom’s flagging consumer electronics operations, and to force the firm’s music, movie and TV companies to be more transparent to shareholders.

The Sony top guard have long denied recurrent rumours that a sale of its entertainment assets is on the agenda, though when Daniel Loeb, whose Third Point hedge fund now controls just under 7% of Sony stock, proposed the partial sell-off (to float 20%), Sony chief Kazuo Hirai said it was an “important proposal” that his board would fully consider.

But support for the idea within Sony HQ, and amongst some other key shareholders, was never high, and in a statement earlier today the firm said its board was unanimous in its decision to knock back the Loeb plan, adding that 100% ownership of its entertainment businesses was “fundamental” to the success of the wider Sony business.

Hirai says: “Sony’s entertainment businesses are critical to our corporate strategy and will be important drivers of growth. I am firmly committed to assuring their growth, to improving their profitability, and to aggressively leveraging their collaboration with our electronics and service businesses”.

Noting that part of Loeb’s plan was about forcing more transparency in the affairs of the Sony music and movie firms, Hirai did also commit to make additional disclosures about the operations of those businesses to investors moving forward.

Loeb said he was “disappointed” with the decision, and would “explore further options to create value for Sony shareholders”.

Officially the board of Sony Corp are still considering those previously reported proposals by shareholder Daniel Loeb to spin off 20% of their US-headquartered entertainment business, which includes Sony Music and Sony/ATV Music Publishing, though according to Japanese newspaper Nikkei directors are ready to dismiss the plan.

Loeb, whose Third Point company holds just under 7% of Sony Corp stock, says that if the conglom was to float a fifth of its telly-film-and-music unit it would provide capital to fund the revival of the company’s flagging consumer electronics division, and would for the Sony entertainment companies to be more transparent to investors.

Sony chief Kazuo Hirai has called Loeb’s pitch an “important proposal”, and said he would respond after the board had properly discussed the plan. But according to Nikkei, the CEO is poised to say “no” to the proposals. It’s thought some of Sony Corp’s key Japanese shareholders also oppose Loeb’s plan.

The knock back will follow the news that Sony Corp made a profit of 3.5 billion yen in the quarter to 30 Jun, a marked improvement on the 24.6 billion yen loss the group made in the same period in 2012. The weakening of the yen has helped a lot in that recovery, though some of Hirai’s restructuring and cost-cutting efforts may have also played a role. And on the electronics side, strong sales of the Xperia smartphone have contributed to the upturn.

In the latest set of Sony figures, Sony Music posted an operating income of 10.8 billion yen, up from 7.3 billion yen in the same period last year.

01: A load of old MegaUpload data was deleted. Well, actually, it was deleted in February, but we only found out this week. The server firms that hosted the controversial file-transfer service have been left holding onto vast amounts of data ever since the US authorities shut the original Mega company down in January 2012.

MegaUpload’s lawyers have tried to persuade American prosecutors to free up some of the defunct company’s frozen assets to pay those server firms, or to fund a programme whereby former Mega users could reclaim any legitimate files they lost access to when the file-transfer platform suddenly went offline. But so far the American authorities have not played ball.

The most high profile of Mega’s former server providers, US-based Carpathia Hosting, is holding onto the old files at its own expense, but it turned out this week that the digital company’s European host, LeaseWeb, had already wiped the former Mega servers. MegaUpload founder Kim Dotcom was not impressed. CMU report | Telegraph report

02: Daniel Loeb put more pressure on Sony to float its entertainment business. The boss of US investment fund Third Point, now a sizeable shareholder in Sony Corp, wants the Japanese conglom to spin-off its US-headquartered entertainment business and to sell a chunk of it. Loeb sent a new letter to the Sony top guard pushing for that move this week. He reckons such a development would free up cash to help fund the revival of Sony’s flagging consumer electronics business, and make the Sony film, music and TV companies more accountable to investors. CEO Kazuo Hirai confirmed at Sony Corp’s Annual General Meeting this week that the proposal is being considered. CMU report | Bloomberg report

03: European collecting societies announced a new alliance. The UK’s PRS, Sweden’s STIM and Germany’s GEMA will form a ‘licensing hub’ to make cross-border licensing simpler for digital players, and to account to music publishers and songwriters faster and more accurately. Or so the three rights bodies say. GEMA will also take a stake in PRS and STIM’s existing joint venture company, the International Copyright Enterprise. CMU report

04: vKontakte seemingly started removing music files. The Russian social network and Facebook rip off has been accused by both local and international music companies of facilitating the distribution of unlicensed music over its platform. It lost a legal battle with Russian music company SBA over the issue last year, and according to local media now seems to be removing music files uploading by its users. CMU report | Music Ally report

05: Global Radio confirmed it was appealing the Competition Commissionruling regarding its Real Smooth takeover. The Commission has told the radio giant that it must sell more of what was the Guardian Media Group’s radio company, which it acquired last year, than it will be allowed to keep, because of concerns that the takeover will reduce competition in local advertising markets. But Global confirmed it would appeal this week, arguing the Commission hadn’t done enough homework in its investigation, and had failed to prove the lessening in competition would be “substantial”. CMU report | Radio Today report

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Daniel Loeb’s investment firm Third Point has increased its stake in Sony Corp slightly, from 6.5% to 6.9%, and he celebrated the occasion by sending another letter to the Japanese firm’s top man, Kazuo Hirai, calling for 15-20% of the conglom’s US-based entertainment business to be floated.

As previously reported, while Sony Corp chiefs have in the past denied speculation that they were considering selling some or all of their film, music and telly assets, to free up funds to help speed up the revival of the flagging Sony electronics business, this time round the company’s board has said it is considering Loeb’s proposals.

In the latest letter, Loeb adds that there are other benefits to the idea of floating the Sony Entertainment company, other than raising quick cash, in that it would force that side of the business to be more transparent to investors, being directly listed on a stock exchange, rather than sitting under its parent company.

According to the Wall Street Journal, Loeb says the Sony entertainment business lacks the “discipline and accountability” of some of its rivals, adding: “In light of this track record, it seems difficult to argue that entertainment would not be strengthened by the transparency that comes with public reporting, an active media analyst community evaluating financial performance regularly and an expert board with strongly aligned incentives”.

Responding to the latest letter, Sony Corp said in a statement: “Sony welcomes investment in the company. We are focused on creating shareholder value by executing on our plan to revitalise and grow the electronics business, while further strengthening the entertainment and financial service businesses which generate stable profit. As President and CEO Kazuo Hirai has said repeatedly, the entertainment businesses are important contributors to Sony’s growth. We look forward to continuing constructive dialog with our shareholders as we pursue our strategy”.

Although Loeb’s proposals for a part-sale of the Sony Entertainment business are being considered in a way previous suggestions of the same have not, insiders say some other key investors in Japan oppose the plan, seeing it as short-termist.

Proposals by US-based hedge fund man Daniel Loeb that Sony Corp should sell a slice of its entertainment business to help fund the restructuring of its struggling consumer electronics divisions have their opponents, insiders say, even though the top guard at the company is considering then.

As previously reported, Loeb’s Third Point fund has a 6.5% stake in Sony Corp, making it one of the firm’s biggest shareholders. He proposed a portion of the Sony music, movie and TV unit be sold to existing shareholders earlier this month, to free up monies to help rescue Sony Corp’s struggling electronics business. And while Sony bosses have previously denied past rumours that they were considering selling some or all of their entertainment assets, last week they admitted they are given Loeb’s plan some consideration.

That said, insiders say that some other significant Sony shareholders, especially those based in Japan, oppose Loeb’s proposal, saying that it is a move that would deliver only short term benefits, and may cause long term harm.

Sony management confirmed it was considering Loeb’s plans last week, ahead of an announcement that the company would also raise funds to help with recovery by issuing $1.5 billion in five year bonds to ordinary Japanese investors next month.

01: Global Radio was told to sell stations in seven regions as part of its Real Smooth acquisition. The demands by the UK competition regulator regarding the radio giant’s purchase of what was the Guardian Media Group’s radio business were pretty severe, and mean that Global will likely have to sell on more of the Real and Smooth Radio networks than it’ll be allowed to keep. This means Global could lose out significantly from the whole deal. It remains to be seen if the radio giant will appeal the Commission’s ruling. CMU report | Guardian report

02: Eminem’s publisher Eight Mile Style sued Facebook and its ad agency Wieden+Kennedy, alleging that the social network used music from one of Slim Shady’s tracks, ‘Under The Influence’, without permission for a promotional film shown during a webcast by the firm’s top man Mark Zuckerberg. The publisher also hit out at a letter from W+K’s lawyer accusing Eminem collaborator Dr Dre of himself lifting music from a Michael Jackson song without permission when recording ‘Under The Influence’, with Eight Mile Style’s reps saying that was a ridiculous allegation, not least because Dre didn’t work on that track. CMU report | Courthouse News report

03: Five one time Grooveshark employees were taken off one of the major labels’ lawsuits against the often controversial streaming service, after they signed agreements pledging to never infringe a music copyright again. The lawsuit, led by Universal, accuses Grooveshark of having its staff upload unlicensed content to its own servers. Legal papers listed a number of said employees, but Benjamin Westermann-Clark, Paul Geller, John Ashenden, Chanel Munezero and Nikola Arabadjiev have now all been removed after signing the never-infringe-again agreement. The Grooveshark company and co-founders Sam Tarantino and Josh Greenberg are still named. CMU report | DNM report

04: Sony was considering a proposal to sell off some of its entertainment business. The proposal was made earlier this month by Daniel Loeb, whose hedge fund Third Point now owns 5.6% of Sony Corp. He suggested the Tokyo-based entertainment and electronics firm sell off a slice of its US-headquartered music, movie and TV business to free up funds to speed up the recovery of its flagging electronics division. Although Sony top guard have in the past denied reports that they were considering any such sale, Japanese newspaper Nikkei said this week that they had now begun to give Loeb’s proposals some thought. CMU report | Billboard report

05: It was confirmed 93 Feet East had its licence back. The East London venue was shut following a police raid in January and amidst allegations management had not done enough to combat the trade and consumption on drugs on their premises. But following an appeal hearing at Thames Magistrates Court last week, bosses of the venue have won their licence back and are now free to reopen the club. CMU report | Metro report

According to Japanese newspaper Nikkei, Sony Corp is now considering looking into the previously reported proposal by one of its key shareholders to sell a slice of the firm’s US-based entertainments division.

There has been speculation for sometime that the Tokyo-based electronics and entertainment giant may sell off some or all of its music, film and television interests, most of which have generally being doing OK in recent years, in order to raise cash to help the flagging electronics side of the group stage a recovery. Though Sony top guard have in the main always denied such rumours.

But earlier this month, hedge funder Daniel Loeb, whose Third Point company now owns 6.5% of Sony Corp, put a plan to the firm’s management to sell up to 20% of the Sony entertainment business, mainly to existing Sony Corp backers, in order to free up funds to help speed up the slow recovery of Sony Consumer Electronics.

Sony has so far refused to comment on Loeb’s proposals or the new reports that they are actually being considered, though it does seem that even if some consideration is being give to investigating the Loeb plan, it’s very much early days as yet.

The CEO of hedge fund Third Point, Daniel Loeb, has called on Sony Corp to sell off a slice of its entertainment business in a bid to boost profits, according to the New York Times. The US-based Sony entertainment group includes the Sony Music record company and the firm’s half of the Sony/ATV music publishing business.

Third Point has acquired a 6.5% stake in Sony Corp, making it one of the largest shareholders in the company. Wielding this new power, Loeb travelled to Tokyo at the weekend for meeting with the company’s execs, reportedly praising them for Sony Corp’s recent return to profit, but pushing for more to be done to maintain this trend and to revive its core electronics business.

According to the NYT, Loeb proposed that 15-20% of the entertainment business be sold to existing shareholders. He also said that Third Point would offer $2 billion to support such a move.

In a statement, Sony spokesperson Shiro Kambe said: “We are focused on creating shareholder value by executing on our plan to revitalise and grow the electronics business, while further strengthening the stable business foundations of the entertainment and financial services businesses. We look forward to continuing constructive dialogue with our shareholders as we pursue our strategy”.

Sony Corp has moved back into profit after a number of years of loss-making madness, thanks in part to a weakening of the yen – the strength of the Japanese currency in recent years having hindered the value of the firm’s non-domestic profits.

In it’s latest earnings report, Sony reported a 93.9 billion yen ($948 million) profit for the final quarter of its last financial year, and a year-end profit of 43 billion yen ($434 million), compared to the 457 billion yen ($5.7 billion) loss it made in the previous year. Sony bosses said that they now expected the company’s recovery to continue, predicting a profit of 50 billion yen for the current financial year.

The Sony Music business, which includes Sony Corp’s three music companies (the worldwide record company, the Japanese record company and its half of the Sony/ATV publishing group), netted profits of $396 million on sales that were every so slightly down on the previous year, partly due the ongoing shift from physical to digital, and partly because of a less strong release schedule in Japan.

In related news, Sony Music has also confirmed that it’s purchase of half of the Now! That’s What I Call Music! franchise has been approved by European regulators. As previously reported, Universal was forced by competition regulators to sell what had been EMI’s half of the brand after it acquired the EMI record company. Sony was confirmed as the buyer in February.

Sony Corp has renewed the contract of Michael Lynton, the head of the Japanese conglom’s US-headquartered entertainment business. As previously reported, Lynton, boss of the Sony film company, also became CEO of Sony Entertainment just over a year ago, so that the Sony record and music publishing companies also report into him.

He in turn reports into Sony Corp chief Kazuo Hirai, who said yesterday: “Michael’s steady leadership and strong vision for the digital future will help keep Sony’s entertainment businesses stable and reliable contributors to Sony’s growth. I look forward to working closely with Michael in ensuring that music and pictures remain integral parts of our global strategy. We’re thrilled he will continue at the helm for years to come”.

Lynton himself added: “I am grateful to work with some of the finest minds in the entertainment business, starting with my partner at Sony Pictures, Amy Pascal, as well as Doug Morris at Sony Music and Marty Bandier at Sony/ATV. They are the best in their fields, and together we will strive to bring the very best films, music and television shows to our growing, global audiences”.

The latest quarterly financial report from Japan’s Sony Corp provided some glimmers of hope after several years of doom and gloom, with net losses down to 10.8 billion yen (£73 million) for the last quarter of 2011, compared to losses of 158 billion yen for the same quarter a year earlier. Sales were also up 6% to 1.9 trillion yen.

As previously reported, despite the music and film industries having had a challenging few years, it’s not Sony’s mainly US-based global entertainment businesses that have been causing problems for the Tokyo-based parent company. Rather, a slump in the fortunes of the group’s traditional cash cows in consumer electronics, and especially in the television set space, has hit the firm hard, as it has also had to tackle issues thrown up by a strong yen and various natural disasters.

Arguably a weakening of the yen was the key factor in Sony seeing some improvements in the latter part of 2012, which resulted in a very mixed response in investment circles to the latest announcement, despite losses for the last nine months being 75% down on the previous same period – investment types also looking for revenue boosts that come from product innovations.

One from the ‘like, they still made those?’ files, and Sony has confirmed it is stopping the production of MiniDisc stereo systems this spring. And while it will continue to make actual MiniDiscs, with the tech giant having already stopped producing portable MiniDisc players in 2011, that’s basically the beginning of the end of the briefly buzzy 1990s better-than-CD-honest data-storage device whatnot.

We’d include a quote from someone still using MiniDiscs, but after a brief search of the world, we couldn’t find anyone. Though now that they are officially being phased out, a Shoreditch-based MiniDisc revival seems inevitable (after all, the slightly exaggerated cassette revival followed the news that Sony was ceasing the manufacture of the old-school Walkman in the US). We’ll keep an eye out for it and let you know.

The boss of Sony Corp has told delegates at the Consumer Electronics Show in Las Vegas that selling his company’s entertainment businesses is not on the agenda at all.

There has been much speculation about the Japanese conglom being split up in recent years as Sony Corp tackles various financial woes brought on by a slump in the company’s consumer electronics business, a persistently strong yen and various natural disasters. Kazuo Hirai took over from former Sony chief Howard Stringer last year with a brief to turn round the group’s fortunes.

Although Hirai’s own Sony career has been more on the entertainment side, his focus at the moment is on reclaiming market share for the company’s consumer electronics divisions, and he was at CES to big up new products in that domain, in particular ever higher definition video products, bringing cinema quality film into the home.

Despite the entertainment industry facing its own challenges, the Sony music and movie businesses, mainly headquartered in the US, have been doing alright of late, and some have speculated that they might be split or sold off from the rest of Sony Corp, to provide a cash boost for the parent company, or to ensure the flagging electronics side of the organisation doesn’t hinder the entertainment side.

But Hirai told CES in no uncertain terms “we are not selling” the Sony movie and music businesses. Like his predecessors, Hirai reckons that there is much to be gained by Sony Corp making both the hardware via which consumers access entertainment content, and the content that is consumed, though realising those benefits will require the different Sony businesses to collaborate more, which is something the Sony Corp top guard are always banging on about, though past ‘Sony United’ initiatives have had only limited success.

Though, still, Sony’s strong presence in the movie and music making industries does still arguably give the company’s consumer electronics business an edge over many of its recently more buoyant competitors, even though that advantage hasn’t been particularly well utilised in recent years.

The Sony exec who oversaw the acquisition of EMI Music Publishing by a Sony/ATV-led consortium is to join Warner Music as Chief Operating Officer in January, it was revealed on Thursday.

Rob Wiesenthal was, until this year, CFO for Sony Corp Of America, and played a role in many of the big deals done by Sony’s entertainment companies, including the buying out of Bertelsmann from the SonyBMG record label joint venture in 2008, and more recently the expansion of the Sony/ATV music publishing business through the EMI purchase.

Shortly before the EMI acquisition was completed, and after Howard Stringer departed the top job at Sony Corp HQ in Japan kicking off an executive rejig at the conglom’s American company, Wiesenthal moved into a role within Sony/ATV itself, overseeing the publisher’s non-America/UK operations and, in particular, the integration of the Sony/ATV and EMI publishing businesses, which was complicated somewhat by the structure of the EMI deal (in that other investors were also involved).

In his new job as COO (Corporate) at the mini-major, Warner Music, Wiesenthal will report directly into CEO Stephen Cooper. It’s a new post that indicates firstly that Cooper wants more support at a corporate level now that he has taken on a more direct role in managing the Warner record companies following the departure of Lyor Cohen in September, and secondly that Warner may be planning a number of acquisitions in 2013 in a bid to boost its size (it now being dwarfed by its two rivals Sony and Universal). Ironically, Warner only this week lost out to BMG in the bidding for the EMI catalogues being sold by Wiesenthal’s current employer.

Confirming the new appointment, Warner boss Cooper said: “There are few media and technology executives of Rob’s stature and expertise. His commercial acumen, commitment to innovation and wide-ranging experience make him a suburb addition to our talented management team”.

Following the news earlier this month that credit ratings agency Moodys had downgraded Sony Corp to a debt rating of Baa3, one above the rating that is officially termed ‘speculative’ but colloquially known as ‘junk’, rival credit raters Fitch have gone one step further, plonking the Japanese conglom into a very tricky position for raising funds.

Both Sony and also-Japan-based rival Panasonic have been moved into a ‘junk’ rating position, with Fitch saying that both companies face major challenges after a number of tricky years, during which rivals have stolen ground in the consumer electronics domain. The strong yen also remains an issue. Fitch’s Matt Jamieson told the Financial Times: “This wasn’t an easy decision, but [both companies’] reputations have been hit so much that it will take a long while to crawl back’.

Quite what impact the Fitch switch will have on Sony’s ability to raise money in the coming months remains to be seen, and may depend on whether the other rating agencies follow suit. But continued talk of Sony’s woes in the consumer electronics space will only add to speculation the firm is considering selling its more successful US-headquartered entertainment division, even though such rumours have always been denied by the corporation’s top guard.

Ministry Of Sound yesterday announced an alliance with Sony Corp’s Omnifone-powered streaming platform Sony Entertainment Network to make its Hed Kandi compilations and singles available via a licensed streaming service for the first time. The new Hed Kandi channel will be promoted across the Sony Entertainment Network’s Music UnLimited platform worldwide as part of the deal.

Ministry Of Sound’s Tom Bulwer told CMU: “Our partnership with Sony and Omnifone allows us to reach a new truly global audience for Hed Kandi’s uplifting catalogue. Sony’s Music Unlimited service also enables us to introduce the Hed Kandi experience to our fans via a vast range of connected devices and mobile apps from wherever they are around the word. The service’s premium model also enables us to deliver our music in a way that is economically viable”.

The Moody’s bond credit ratings agency downgraded Sony Corp on Friday, from Baa2 to Baa3, meaning the entertainment and electronics giant is now just one step above having its debt securities rated “speculative”.

The rating change follows Sony’s most recent financial update, which actually saw revenues increase, earnings before interest and taxes go into profit, and losses overall half, though even that improved performance didn’t meet expectations in City circles, where analysts had been hoping for a quicker turn round in Sony Corp’s fortunes after years of depressing figures.

Moody’s said that it believed that the Sony film and music businesses remained “stable”, but that it was concerned about the continued poor performance of Sony’s all important consumer electronics divisions, especially TVs and phones. On the entertainment side, the credit agency said that what concerns it had were about the future performance of Sony’s gaming business.

Sony Corp is yet to respond to the downgrading, the group’s second in a month. The company’s newish overall chief, Kazuo Hirai, has been trying to turn round the Japanese conglom’s fortunes, the firm having suffered mainly from the slump in sales of its televisions and some other consumer electronic devices, coupled with a strong yen and some natural disasters hitting certain key operations.

]]>http://www.completemusicupdate.com/article/ratings-agency-downgrades-sony-corp/feed/0Sony Corp doing better, but not as well as many analysts hopedhttp://www.completemusicupdate.com/article/sony-corp-doing-better-but-not-as-well-as-many-analysts-hoped/
http://www.completemusicupdate.com/article/sony-corp-doing-better-but-not-as-well-as-many-analysts-hoped/#commentsFri, 02 Nov 2012 12:26:25 +0000http://www.thecmuwebsite.com/?p=62927

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Sony Corp’s fortunes may be on the turn after some difficult years, with revenues up slightly in the second quarter of their current financial year, and losses down. Though the electronics and entertainments conglom still didn’t perform quite as well as many analysts had predicted.

The Sony company overall posted a loss of 15.5 billion yen, compared to 27 billion a year ago. Revenues were up 1.9% to 1.6 trillion yen, and earnings before interest and taxes actually put the group into profit.

As previously reported, slumping sales on the consumer electronics side coupled with a strong yen and some natural disasters hitting operations have been mainly responsible for Sony Corp’s bad fortunes in recent years.

On the entertainment side things haven’t been so bad and, while the Sony film company saw operating profits slip year on year (though partly because of one big deal in 2011), Sony Music saw a 24.1% increase in operating profit, despite a 4.3% decline in revenue, thanks, presumably, to some quiet streamlining here and there across the music major. I mean, Sony could pretty much fire anyone not working on One Direction at the moment and it not have that big an effect on overall success.

The worldwide administration of Michael Jackson’s Mijac Music catalogue will now be handled by Sony/ATV, a three decade partnership with Warner/Chappell having ended in late 2010.

Jackson, of course, owned half of the Sony/ATV music publishing company, having bought the firm outright in 1985, before selling 50% to Sony Corp ten years later. However, the Mijac Music company, which preceded Jackson’s acquisition of ATV, was never made part of the bigger publishing venture, even when Sony became a partner in the ATV company in 1995.

However, Sony/ATV – recently expanded, of course, by gaining control of the EMI Music Publishing business – will now also administrate the Mijac catalogue, which includes Jackson’s own songs plus music by the likes of Sly And The Family Stone, Leon Huff and Kenneth Gamble, and songs that became famous after being recorded by Ray Charles, Elvis Presley or Aretha Franklin.

Confirming the new deal with Mijac, Sony/ATV boss Martin Bandier told reporters: “Everyone at Sony/ATV looks forward to finding innovative ways to use these songs while protecting their legacy”.

Meanwhile John Branca and John McClain, the executors of the Michael Jackson Estate, which still owns 50% of Sony/ATV, said: “We are excited that the company Michael helped found, Sony/ATV Music Publishing, and in which his Estate remains a 50% partner, will represent these amazing songs along with a rich collection of other music recorded by some of our greatest popular artists”.

Sony Corp’s latest financials contain more gloom, as has become the tradition for the electronics and entertainment giant in recent years. Losses from April to June were 24.6 billion yen, up from 15.5 billion yen in the same quarter the previous year. The strong yen continues to impact on the Japanese conglom’s international revenues, while declining sales of TVs and PlayStation consoles didn’t help.

Sony’s music businesses were profitable, though less so than the same quarter the previous year, collectively generating 7.3 billion yen in profits from 98.8 billion yen in sales, just under 40% less than a year earlier. The “worldwide contraction of the physical music market” and a smaller number of key releases in the Japanese market were both blamed.

Sony Corp yesterday announced the launch of its Omnifone-powered streaming music service Music Unlimited into its backyard, the Japanese market. It’s the first international streaming music platform to launch in Japan, where licensing such services has been notoriously difficult in the past.

All four majors are on board, with a catalogue of ten million tracks available. As in other markets, including the UK, Music Unlimited will be accessible via a range of Sony devices, as well as via Android and Windows powered smartphones.

Sony Network Entertainment International President Tim Schaaff told reporters: “Bringing the cloud music subscription service to Japan, which is one of the largest music markets in the world, is a key step in the expansion of Music Unlimited”.

In related news, The Next Web has reported that the Sony Music record company in Japan has finally announced it will make its catalogue available to Apple users for download, having previously refused to licence iTunes. However, it seems that a special app will be needed to play the major’s music on Apple gadgets.

The music bit of Sony’s streaming content platform, the Sony Entertainment Network, will reach Apple devices later this week with the launch of an app for the iPhone and iPod touch (though not the iPad yet).

The Entertainment Network (operated by Sony’s consumer electronics division and for a short time called Qriocity) primarily integrates different Sony-made devices, including VAIO computers, Bravia TVs and PlayStation consoles, though there is an ambition to make the service device agnostic, and Android apps have already been released. The move onto Apple devices is the next obvious step.

The Sony Entertainment Network’s Music Unlimited service is similar to the premium version of Spotify, with a £9.99 a month subscription fee, though it now also offers a cheaper (£3.99 a month) service that works like Apple’s iTunes Match, in that it scans a user’s MP3 collection and allows them to stream any content in that collection to additional devices via Sony’s servers.

Confirming the arrival to Apple devices later this week, Sony exec Michael Aragon told reporters: “We want to let users pick up their favourite device and crank up the Music Unlimited service at any time. With the addition of the new iPhone and iPod touch app, users with a Basic or Premium subscription can listen to their favourite songs across a number of the most popular connected devices – in and out of the home”.

CMU’s Andy Malt and Chris Cooke review the week in music and the music business, including the EC’s approval of the sale of EMI Music Publishing to a Sony-led consortium, One Direction UK v One Direction USA, new announcements from Facebook and Spotify, plus Tupac Shakur’s first live performance since his death. Get the CMU Weekly Podcast every Friday by signing up via iTunes or RSS.

With the European Commission expected to make a ruling on Sony/ATV’s bid to buy the EMI publishing company tomorrow, the New York Times has published extracts of a confidential report that possibly provides some indications of what will happen to EMI Music Publishing if the takeover goes ahead.

As previously reported, the Sony-led bid to buy the EMI publishing firm is slightly complicated, because Sony does not own Sony/ATV outright, and a number of other investors are also part of the EMI purchase. Sony/ATV owner Sony Corp Of America and the Michael Jackson Estate would be joined by GSO Capital Partners, Jynwel Capital, the investment arm of the Abu Dhabi government and one time record industry man and film producer David Geffen as shareholders in EMI Publishing.

But day to day the EMI publishing business would be controlled by Sony/ATV, which is relevant to competition regulators because, while Sony Corp does not own any of its music publishing interests outright, Sony/ATV chief Marty Bandier would control by far the biggest publishing catalogue in the world (31% market share according to this confidential report), which would make him very powerful indeed in digital licensing and collecting society dealings. Opponents to the deal say that kind of market dominance would be anti-competitive, and damaging to the emerging digital music sector.

Sony/ATV’s control of EMI is also key to Sony’s co-investors though, because it will enable economies of scale that will maximise the profits of the EMI publishing catalogues.

Because of the number of investors in the EMI deal and, seemingly, an explicit agreement between Sony and the Jackson Estate, EMI Music Publishing will remain an autonomous company if the deal goes ahead, so its songs and songwriters won’t be absorbed by Sony/ATV, and presumably the firm will need to retain its own A&R teams.

However, according to the report, prepared for Sony by bankers at UBS in January as part of plans to issue bonds to help fund the acquisition, Sony/ATV will look after the administration of the EMI catalogue and handle licensing deals, enabling significant cost savings, ie redundancies. The report suggests that over half of EMI Publishing’s 515 employees could be let go, 152 in the first year of ownership, 174 down the line, resulting in savings of $70 million a year overall, after Sony/ATV has taken a commission for its work.

The report was written for investment types four months ago, so it’s not clear how much of the plans in the document is actual current strategy, but it seems clear that if the Sony/ATV deal does go ahead there will be considerable cuts at the EMI publishing group, even though the company will remain autonomous in some respects. Needless to say, given the ongoing investigation into the competition elements of the proposed deal, Sony refused to comment on the document, telling reporters yesterday: “Discussing details of any integration plan is premature while the regulatory approval processes are ongoing”.

Sony Corp has confirmed the executive rejig in its American division that was rumoured last week, which sees Sony Pictures Entertainment boss Michael Lynton also become CEO for Sony Corporation Of America. Sony General Counsel Nicole Seligman will also become President, heading up business and legal affairs for the division.

The promotions, which come as the top guard at Sony Corp HQ in Tokyo change, with Kazuo Hirai rising to the CEO post, will kick in at the end of June. The move means that the bosses of Sony’s two US-based music companies – Sony Music’s Doug Morris and Sony/ATV’s Marty Bandier – will both report to Lynton.

Commenting on the appointments, new Sony boss Hirai told reporters: “I have known both Michael and Nicole for many years, and they will do an excellent job at Sony Corporation Of America. They will be key members of my management team as we build on the progress made under the leadership of [my predecessor] Howard [Stringer] and fulfill Sony’s destiny as the company best able to make and deliver the kind of entertainment, products and services people want”.

Elsewhere, it was also confirmed that Sony Corporation Of America’s CFO Rob Wiesenthal will move into the Sony/ATV music publishing company as Chief Strategy Officer, reporting to Bandier, and overseeing all territories outside North America and the UK. It’s thought he’ll also be involved in working out quite how new acquisition EMI Music Publishing (assuming that takeover gets the go ahead from regulators) will fit into the Sony/ATV business, given the Sony publisher will not own the EMI company outright.

Management at Sony’s US entertainment division is to be shaken up alongside the handover of executive power at parent company Sony Corp in Tokyo. As previously reported, current Sony Corp chief Howard Stringer is due to hand over the reins to Kazuo Hirai next month.

According to the Financial Times, the main winner in the move – expected to be confirmed when Hirai takes over in Japan – will be Michael Lynton, current CEO and Co-Chairman of Sony Pictures Entertainment. It’s thought he will also take on the title of CEO of Sony Corporation Of America, which will mean that the firm’s music businesses – the Sony Music record companies and Sony/ATV music publishing operation – will come under his control.

That said, it’s thought Lynton will continue to focus day to day on Sony’s American film and TV studios, still working in partnership with his co-Chair at SPE Amy Pascal, leaving Sony Music boss Doug Morris and Sony/ATV chief Marty Bandier to get on with running the music companies as they see fit. However, they will report to Lynton, who will be their main link into Sony Corp HQ and Hirai.

Also likely to expand her remit as part of the SCA rejig is Nicole Seligman, Sony’s General Counsel, who is expected to take the title of president of the US division, and will oversee all of its corporate functions, including finance and communications as well as legal.

Meanwhile it’s thought SCA’s current CFO, Rob Wiesenthal, will take on a new senior operational role at Sony/ATV should its acquisition of EMI Music Publishing get regulator approval, creating the biggest music publishing enterprise in the world, but one with a very complicated ownership structure.

All this rejigging has led to speculation that Sony’s key entertainment businesses will be left pretty much to their own devices under Hirai who, despite spending much of his Sony career on the entertainment side, and much time within its US business, is expected to focus his attentions on the conglom’s Japan-led electronics companies, which have been under-performing of late while the entertainment units – although facing tough challenges – have been performing OK.

Some also wonder whether this expected rejig is a sign that Sony might at some point spin off its US-orientated entertainment businesses into a separate entity, though that’s a plan Sony bosses deny exists.

Sony’s music publishing company Sony/ATV has renewed its contract with its top man, Mr Marty Bandier. Terms of the new deal are not known, obviously, but it’s been dubbed a “long term contract”.

Of course if Sony/ATV is allowed to buy EMI Music Publishing by European and US regulators, Bandier will be reunited with the publishing catalogue he used to head up, and will become the most powerful man in the music publishing sector. He’ll probably be given his own throne at PRS HQ. A really comfy throne, with secret draws like Jimmy Saville’s chair used to have.

Confirming the new deal, Sony Corp top dog (for now) Howard Stringer told reporters: “Music publishing is an incredibly successful part of our business and with Marty staying on at the helm, Sony/ATV is well positioned for the years ahead”.

CMU’s Andy Malt and Chris Cooke review the week in music and the music business, including BT and TalkTalk’s second failure to force parliament to rethink the Digital Economy Act, licensing gripes of various kinds made by RadioCentre boss Andrew Harrison at the Westminster Media Forum, Bradford Cox’s recent dissection of ‘My Sharona’, The Wanted and One Direction’s non-feud, and Atari Teenage Riot’s mega-feud with Sony. Get the CMU Weekly Podcast every Friday by signing up via iTunes or RSS.

A legal rep for the two hackers accused of breaking into a Sony Music server and accessing over 50,000 files, including a lot of unreleased Michael Jackson material, has said she is confident her clients will be found not guilty of the various copyright and computer misuse charges that were thrown in their direction last week.

It also turns out that, rather than being sinister and secretive hacktivists attempting to bring down the empire of the evil copyright exploiting Sony Corp, the defendants in this case are obsessive Jacko fans who possibly got a bit carried away.

I don’t know whether solicitor Karen Todner is also a Jackson fanatic, though her statement about her clients’ apparent innocence makes her sound like one. She told reporters that James Marks and Jamie McCormick “are eager to point out to Michael Jackson’s fans and family that they would never do anything to harm the legacy that is Michael Jackson’s music. As Michael Jackson has said, lies run sprints but the truth runs marathons”.

As previously reported, Sony Music discovered one of its digital content servers had been hacked from a British IP address last spring and reported the matter to the UK Serious Organised Crime Agency. They arrested the defendants last May, but the story only recently came to light when the accused men’s case first came to court.

Sony says it informed artists who were affected by the data grab, including the Michael Jackson estate, but that it made no public statement because no customer information was accessed.

Atari Teenage Riot track ‘Black Flags’ recently turned up in an advert for Sony’s PSVita handheld games console. The move confused and angered many fans when it appeared online last month, due to the band’s long held anti-establishment stance. However, says frontman Alec Empire, the group haven’t bowed down the The Man just yet.

Writing on the band’s Tumblr blog, Empire explained that back in 1999 Sony used one of the band’s tracks in an advert without permission, saying: “Even though the thing got settled in court, kind of, I never felt they paid what they owed”.

So the new sync deal, it seems, was basically an act of revenge. Empire goes on to reveal that he had been waiting “until it became unstoppable” to reveal that the royalties earned from the ad sync had been donated to the Anonymous Solidarity Network, an organisation which offers support to people who are facing prosecution for allegedly being members of online activist group Anonymous.

Members of Anonymous, of course, were behind the initial attack on Sony’s servers last year, which in turn led to custmer details being stolen from accounts on its both its PlayStation Network and streaming content platform the Sony Entertainment Network (then still called Qriocity).

As expected, pan-European indie labels trade body IMPALA yesterday reaffirmed its opposition to Sony/ATV’s planned acquisition of EMI Music Publishing, as the Sony Corp led music publisher finally submitted its bid plans to the European Commission for approval.

As previously reported, Sony/ATV, a joint venture between Sony and the Michael Jackson estate, is leading a consortium of investors in its EMI publishing acquisition. It’s thought EMI Music Publishing would stay an autonomous company if the Sony deal goes ahead, but ultimately reporting into Sony/ATV boss, and former EMI Music Publishing chief, Marty Bandier.

IMPALA opposes both Universal’s bid to buy the EMI record labels and Sony’s bid for the publishing catalogues, arguing that the two deals together are the worst possible outcome for an EMI sale, making the two biggest music firms even bigger, so they both dwarf nearest rival Warner.

That would result in a duopoly controlling the mainstream music industry. Both Universal and Sony, though, are confident their bids will be approved by regulators in the US and Europe, who in theory both have the power to block the takeovers, or to insist on remedies, such as the resale of some of the EMI assets the buyers will acquire.

Reconfirming its position yesterday, IMPALA said: “The concerns raised by the European Commission the last time it looked at music publishing concentration centred around the ability of large publishers to control prices and other terms, even in negotiations with much bigger players such as iTunes. This is because they control so much repertoire, making them an indispensable trading partner. These concerns are likely to have even more relevance today”.

It continued: “The independents are also concerned that the deal would give Sony too much power over collecting societies as well as vital industry negotiations, such as the Cannes Agreement, which sets operating terms for societies. They also point out that the deal would reinforce the duopoly effect with Universal, who itself is currently under regulatory scrutiny over its attempt to buy EMI on the recording side”.

Meanwhile IMPALA Exec Chair Helen Smith told CMU: “However this deal is structured in terms of finance and ownership, the result is the same – Sony would increase its negotiating power to an unacceptable extent. We expect the regulators to block both Sony and Universal’s bid to buy EMI”.

It’s thought the European Commission’s consideration of both takeover deals will require full two phase investigations, making any decision unlikely before June at the earliest.

More from the world of mobile, and Sony Corp has completed its acquisition of the mobile maker in which it has long been a partner, Sony Ericsson. The entertainment and consumer electronics giant announced it was buying Swedish mobile firm Ericsson out of the handset business last October, and the deal was finalised yesterday.

Confirming that fact, Ericsson said in a statement: “Ericsson has today completed the divestment of its 50% stake in Sony Ericsson Mobile Communications AB, including the broad IP cross-licensing agreement, jointly announced by Sony Corporation and Ericsson on October 27, 2011. This makes Sony Ericsson a wholly-owned subsidiary of Sony. The agreed cash consideration for the transaction is 1.05 billion euros”.

The completion of Sony’s buy out of the mobile maker follows last week’s news that Google’s acquisition of the Motorola handset manufacturing business had now been approved by competition regulators in both the US and Europe, though both indicated they would be watching carefully to see that the web giant did not abuse the patents it had acquired as part of the deal.

That purchase is still to be approved in China, where Google still has a base despite moving a big chunk of its Chinese operations to separately regulated Hong Kong in 2010. If the Chinese government objected to the Google Motorola acquisition it could throw a serious spanner into the works, though few expect them to do so, despite past tensions between the web firm and the authorities in China.

Sony Corp’s CD manufacturing and distribution company Sony DADC has sold its American CD distribution business to Anderson Merchandisers. The deal will see Anderson take over physical distribution for three of the majors in the US – Universal, EMI and Sony – giving the buyer an important role in the declining but still important CD market Stateside. Anderson already looks after the supply of music product to big US retailers like Walmart and Best Buy.

Sony DADC will continue to manufacture CDs Stateside and to distribute DVDs and Blu-Ray discs, though the Anderson deal does mean two of its American distribution centres will be wound down. Interestingly, at the same time the Sony distribution company was cutting back its disc operations, it was expanding its role in digital distribution by announcing a new deal with Warner Music, also in the US. That deal will see the Sony company handle the logistics of digital distribution for the major, though Warner will also retain account managers to liaise directly with digital platforms on a day to day basis.

Sony Corp is rolling its PlayStation Network into the existing Sony Entertainment Network, putting its online gaming platform more closely alongside the entertainment conglom’s other content-on-demand services, including the Sony streaming music offer.

The PlayStation Network has been operational since 2006, while the Sony Entertainment Network – originally branded Qriocity – went live in 2010.

Both were targeted by last year’s big Sony hack attack that resulted in the personal data of users being made public, and both services going offline for a time, though the embarrassing data spill has been more frequently associated with the PlayStation Network, mainly because of its larger user-base, and that may have been a motivating factor in phasing out the PSN brand.

Though Sony insists the combining of PSN with SEN is part of its bids to unify its digital content brands, and that would make sense too, given the size of the former’s userbase, who may be better persuaded to try out Sony’s music, video and ebook services once the two networks are integrated.

That Sony Corp’s financials will be disappointing has become something of a given of late, and the electronics and entertainment giant’s latest figures did not fail to disappoint. The conglom posted a loss of over $2 billion for its most recent quarter.

The strong yen and flooding in Thailand hitting manufacturing bases were partly to blame, but so were disappointing sales. As previously reported, Sony’s Bravia TV division has been underperforming the most. The company’s new CEO Kazuo Hirai, due to take over from the incumbent Howard Stringer, will particularly focus on that side of the business as he attempts to turn round the company’s fortunes.

Music-wise, the Sony record company saw revenues and profits decline, 11.7% and 21.7% respectively, despite it distributing Adele’s phenomenally successful album ’21’ in the US. Ms Adkins’ album and ‘Live At The Royal Albert Hall’ DVD were among Sony’s most lucrative sellers, along with Susan Boyle’s latest and all that ‘Glee’ nonsense. According to Billboard, Sony Corp Of America CFO Rob Wisenthal, when discussing Sony Music, was very optimistic that the company would be having a very good 2012 now that the leadership of new boss, record industry veteran Doug Morris, is starting to take hold.

Sony Corp has confirmed that Kazuo Hirai, currently the electronics and entertainment giant’s Executive Deputy President, will take over as the firm’s CEO in April, replacing Brit Howard Stringer, who was the first non-Japanese exec to ever head up the 65 year old Tokyo-based company.

As previously reported, Stringer has overseen a troubled Sony Corp since becoming CEO in 2005 (he also became President of the company in 2009, and Hirai will take over that role too). A strong yen hasn’t helped, reducing the value of global and especially American revenue, and more recently natural disasters have hit key manufacturing plants.

But Sony has also suffered as the wider entertainment industry has seen its traditional revenue streams slide, and – most significantly – as three competitors started to outperform the Japanese firm in key product areas, Samsung in TVs, Nintendo in gaming consoles, and Apple in music devices.

Stringer’s grand plan was to more closely align the different strands of the Sony business, utilising the corporation’s entertainment assets with its technology, but the strategy had only limited success. And while most of the firm’s problems were not Stringer’s making, investors have become increasingly impatient for some radical idea that can turn around the company’s fortunes.

Although Hirai’s background at Sony is on the entertainment side, initially within Sony’s music company, and later leading the PlayStation business, he has already indicated his first focus will be sorting out the company’s consumer electronics division, and especially the Bravia TV brand, a supposed cash cow that has been seriously underperforming in recent years.

Stringer will stay on at the Japanese conglom as Chairman of the board, though the exact nature of his role moving forward isn’t entirely clear.

The Association Of Independent Music yesterday urged its members to approach their MPs about the proposed sale of EMI to Universal Music and a consortium led by Sony/ATV.

As much previously reported, the traditionally British-owned major is to be split by its current owners, US bank Citigroup, into its two constituent parts, recordings and publishing, and sold to Universal Music and Sony/ATV respectively. Universal is the biggest music company in the world already, while Sony/ATV’s co-owner Sony Corp, when all of its music interests are combined, is already the second biggest operator in the sector. Meanwhile the two deals will mean that Warner Music, the third remaining major label, is dwarfed by its two rivals.

Pan-European trade body IMPALA, to which AIM is affiliated, announced even before the deals were done that it would oppose any EMI transactions involving Universal and Sony, both of which must be approved by regulators in the US and Europe. IMPALA argues that further consolidation in the music industry is bad news for the wider creative sector, and especially small and middle sized enterprises which will find it even harder to compete with ever bigger major players. IMPALA has a track record here, of course, have attempted – ultimately unsuccessfully, though with some successes along the way – to block previous major music company mergers between Sony and BMG, and Universal and BMG.

Although competition regulators in the European Commission, rather than in individual EU countries, will consider the proposed EMI sale, AIM wants bosses at the labels it represents to contact their representatives in the Westminster parliament, and to ask their MPs to call on the UK government to also review the implications of Universal and Sony becoming ever more dominant. It’s not clear what impact British MPs or ministers could have on the regulatory process, though the letter writing campaign might boost political and public concern about the takeovers, which could theoretically influence the powers that be.

AIM has provided its members with a suggested letter to send to their MPs, which notes the importance of the independent sector in discovering and developing new musical talent, and says that indie firms are already operating in a tricky market because of the dominance of the small number of major players. It says: “Independents can and do launch and support talent, and win market share in an already distorted market, but market distortion must not be allowed to become even greater”.

The letter also notes that third major Warner will become much smaller than its two main rivals as a result of the EMI deals (almost implying that, despite past opposition to the move, the indie sector would have preferred an EMI/Warner merger to the deals now on the table), and cites IMPALA’s argument that if European regulators back these deals they would be going against the guidelines they themselves set when reviewing the aforementioned merger of the Universal and BMG publishing companies back in 2006.

The AIM letter concludes by re-quoting comments made by the boss of the Beggars Group, Martin Mills, when the original EMI deals were announced, that “this looks like breath-taking arrogance. It’s hard to imagine this acquisition being approved, given Universal’s existing dominance in an over-concentrated market. Even greater dominance would be bad news for almost everyone involved in the art and business of music”.

AIM’s campaign comes in the week that Warner Music hired the services of a US legal firm that specialises in anti-trust lobbying. As previously reported, that has led to speculation that it too may oppose the EMI deals as the regulatory investigations get underway.

]]>http://www.completemusicupdate.com/article/aim-rallies-members-to-oppose-emi-sale/feed/0CMU Review Of The Year 2011: The media and the internethttp://www.completemusicupdate.com/article/cmu-review-of-the-year-2011-the-media-and-the-internet/
http://www.completemusicupdate.com/article/cmu-review-of-the-year-2011-the-media-and-the-internet/#commentsFri, 23 Dec 2011 10:58:04 +0000http://www.thecmuwebsite.com/?p=43267

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CMU’s Andy Malt and Chris Cooke look back at a year of digital music innovations and developments, and at the big stories and trends in the media industry.

01 HACK-GATE
2011 was not a good year for British newspapers, even though, via their websites, most are now talking to bigger audiences than ever before. But print readerships and ad revenues continued to slump, while internet ad sales failed to grow sufficiently, mainly because of stiff competition from Google and Facebook for the ad man’s pound. With subscription websites not really working, most publishers now hope some kind of subscription-based app might be a solution, and some dabbled in that area this year.

But bigger than all of that was Hack-gate, a scandal that had been brewing for years, but which exploded when it was revealed in July that, as well as hacking the voicemails of celebrities and politicians, News Of The World journalists had accessed the answer phones of victims of crime too, most notably murdered teenager Milly Dowler. Worse still, a number of NOTW hacks were clearly involved, when the paper’s publisher, Rupert Murdoch’s News International, had always claimed there was just one.

Facing global outrage, NI took the radical step of shutting the NOTW down, but still public anger rumbled on. Former NOTW editor and then NI CEO Rebekah Wade resigned (eventually), Murdochs Rupert and James faced embarrassing questions in parliament, and it all ended up with a big government-instigated inquiry, with the crimes and lies of NI, the tactics of all journalists, and the tricky issue of privacy rights all combined into one big muddle. A major media story, if not hugely music related. Though George Michael got the boot in, and Charlotte Church appeared at the inquiry.

02 HACK ATTACKS
Hacking of another kind also cropped up in the headlines of 2011, as small groups of angry geeks around the world – many affiliated to the likes of Anonymous or LulzSec – targeted the servers of organisations, and sometimes individuals, who represented big copyright owners, or who it was felt were in some way censoring the internet.

Such attacks weren’t new, and had been prevalent in 2010, though an attack on Sony Corp’s servers, which enabled hackers to run off with the personal details of customers of both its PlayStation Network and streaming content platform (then still called Qriocity), was possibly the highest profile attack. And very embarrassing for an already struggling Sony company, whose handling of the crisis was widely criticised.

03 NME V MORRISSEY
Back in 2007, Morrissey gave an interview to the NME in which he appeared to say that an “immigration explosion” had damaged Britain’s identity. Which a lot of people pointed out came across a bit racist. Morrissey, however, claimed that the interview had been reworked to make him sound racist by then editor Conor McNicholas and vowed to sue.

No legal action was forthcoming though, until this year, when the former Smiths frontman finally sued for defamation. In October a judge ruled that the case could go ahead, despite NME publisher IPC Media’s protestation that as Morrissey has released albums and toured successfully in subsequent years, his reputation clearly hadn’t been damaged by the interview, something that is required for a defamation case to succeed.

The case is now pending a court date next year, and though this type of dispute is often ultimately settled out of court, both sides seem so determined to prove their innocence that it looks likely it will actually reach trial. A statement apparently written by Morrissey and published in November made his anger abundantly clear.

04 THE RHYTHMIX DEBACLE
Little Mix recently won this year’s UK ‘X-Factor’, but they didn’t always go by that name. After being created on the show from solo entrants who weren’t deemed good enough to make it through to the final twelve on their own, the original name the girl group chose (or possibly had chosen for them) was Rhythmix, which has a nicer ring to it. Unfortunately, it was also the name used by a charity which works with children who have been bereaved, who are disabled, or who have been sent to youth detention centres, using music as a method to aid personal and communicative development.

The charity owns a trademark in the name for educational activities, but not for music, the space in which ‘X-Factor’ then applied for a registered mark. But the charity’s bosses, fearing Team X’s trademark would hinder their fundraising efforts, hoped that, once made aware of the clash, the show’s producers would change the girl group’s name.

05 A NEW BOSS AT RADIO 1
Former commercial radio chief John Myers undertook a review of the BBC’s national music radio stations this year, concluding that the likes of Radios 1 and 2 are vastly over staffed, and proposing a raft of changes, most of which would help the Beeb in it’s mission to radically cut its costs. Predictably, BBC Radio boss Tim Davie congratulated himself on commissioning the report and ignored most of its recommendations.

While we’re talking about Radio 1, we probably ought to remember that one of the station’s most iconic presenters of old, the one time face of ‘Top Of The Pop’s, and, some would argue, the first ever DJ – Mr Jimmy Saville – died in October.

Success brings backlash of course, and both artists and smaller labels started to hit out at the royalties these services pay out. Whether that matters really depends on whether you think being on Spotify et al has a negative impact on iTunes sales. In the US Century Media, and in Britain STHoldings, both reckoned it did. The big record companies, though, were generally supportive of the streaming services, though they are possibly getting much better royalties. And nevertheless, some big artists, Coldplay among them, did keep their new albums off the streaming platforms. This debate will rumble on in 2012.

07 FACEBOOK PARTNERSHIPS
In September Facebook had a big party to make a big announcement. Everyone there seemed very excited. Alas, the technology changes happening in the background, which were possibly significant, were far too complicated to understand, so everyone focused on the content partnerships also revealed.

Said content partners could now make available widgets that would publish every song a user ever listened to, or every article they ever read. Quite why anyone would want that still isn’t clear, though lots of content partners have made such apps available, and apparently lots of people are signing up to their services as a result.

Possibly the most high profile partner was Spotify, who were brought on stage at the party to demo their app. The Spotify/Facebook love affair meant existing Spotify accounts synced to Facebook would automatically share data, and new Spotify users would have to sign up via their Facebook accounts. Some existing subscribers responded badly to this news, forcing Spotify to make it easier for said users to opt out of the Facebook love-in.

08 APPS
Talking of the app word, as the use of smartphones and tablets continued to grow this year, so too did the use of music apps. Most streaming services now have a premium subscription allowing users to access music via mobile devices using an app, this being seen as key to converting free users to paying subscribers.

Apps also became a routine addition to many artists’ promotional campaigns. Though while many (though not all) artist apps simply collate music, videos and text that already exists online, the bar was pushed high by Björk, who had special apps built for each of the songs on her ‘Biophilia’ album. The apps allowed users to manipulate the songs through various games and activities, as well as providing visual scores of the recorded versions and more.

Whether the app should be seen as a new type of album, a slick promotional tool, or a waste of time, is still being debated, but the trend for artists being creative with their apps will continue.

09 DIGITAL LOCKERS
Digital locker services for music have been around for several years now, the most high profile until this year being MP3.com founder Michael Robertson’s MP3tunes – a service that is locked in a legal battle with EMI which rumbles on despite a judgement in August.

But in March, Amazon decided to launch one too, making music-based lockers suddenly big news. Did the company get licences from the record labels and publishers to make this happen? No. As far as Amazon was concerned, no licence was required to simply store your music somewhere. Those pesky rightsholders, however, argue that there is if you want to then stream tracks back through a player attached to that storage.

His health problems had been high profile in recent years, of course, and were enough to cause Apple’s share price to dip at one time. But he had always returned to work after his various leaves of absence, so when he finally announced in August that he was unable to continue leading the company and stepped down, many feared the worst.

Jobs, of course, was not a music industry person, but such was his and Apple’s effect on the music world with the iPod, iTunes and more that it would seem strange not to mark his passing in our review of the year. His is a legacy that will live on for many years to come, in music and many other fields.

So, Sony types have been very mouthy this week, haven’t they? First up, Rob Wiesenthal, CFO of Sony Corp Of America, was speaking at a UBS Media Conference in New York. He covered a wide range of topics, but on music predicted that streaming services, such as Spotify, Rhapsody, MOG and Sony’s rather lacklustre Entertainment Network, would truly take off once subscriptions were more routinely bundled into mobile phone fees.

He then postured that the major record companies of the future would operate much more like the major music publishers of today, a viewpoint that supports the now abandoned strategy of outgoing EMI boss Roger Faxon to more closely integrate his company’s label and publishing businesses. Of course that’s something Sony would struggle to achieve because while it owns the Sony record company outright, the conglom’s existing and new publishing concerns, Sony/ATV and EMI Music Publishing respectively, are joint ventures, thus preventing a merger of all of the Corp’s music assets.

Meanwhile, when asked about Sony’s decision to install the Android operating system on some of its portable devices, rather than a proprietary platform, Wiesenthal admitted his company was now much more willing to utilise other firms’ software on its hardware, and had accepted the benefits of using open standards.

Elsewhere in Sony exec interview land, the chief of the conglom’s aforementioned Sony/ATV music publishing business, Marty Bandier, has spoken to Music Week about his company’s acquisition of EMI Music Publishing. As expected, the EMI pubbery will remain autonomous from Sony/ATV, it owning only 38% of the new purchase. That means the company will retain, for the time being at least, the EMI name.

Bandier is clearly pleased to have won the fight to acquire EMI, the publishing business he helped grow prior to jumping ship to Sony, though he was cautious when asked how successful the new Sony/ATV offshoot would be, saying: “I’ll let you know in about two years! [This acquisition] could be ranked as the greatest accomplishment or it could be the worst”.

Finally in Sony exec quotesville, more from Tim Schaaff, the boss of that aforementioned lacklustre on-demand content platform, the Sony Entertainment Network, who was asked about his buzzy competitor Spotify at a London press briefing earlier this week. According to Electricpig, Schaaff said he didn’t believe Spotify – market leader in much of Europe, and now one of the highest profile streaming platforms in the US – would come to dominate the streaming content sector in the way iTunes dominates a la carte downloads, insisting all was still to play for in the streaming space.

Said Schaaff: “It’s certainly not in the labels’ interest to have one company dominate everything. That’s not likely to happen, that doesn’t happen in general. Spotify has been one of the first companies to be able to really make a statement about subscription services that has made sense to the consumer, but it’s early days and we used to think that MySpace was going to dominate everything in social networking and they’re gone. Things change very fast in this environment, and fashion changes quickly in this environment, and it’ll be interesting to see how that plays out. We really are at the early stages here, and the question is how will the companies hold up over the long run”.

Sent by EMI chief Roger Faxon to his staff following confirmation the company would be split for sale…

Following my note to you all earlier regarding the sale of EMI Music to Universal Music Group, I am now able to share with you the related news regarding EMI Music Publishing, which is to be sold to a consortium led by Sony. The press release is attached for you here.

Like Universal with EMI Music, Sony and their fellow investors saw an incredible business in EMI Music Publishing, one that represents probably the single greatest collection of songs and songwriters ever assembled. Their willingness to step up to Citi’s valuation of the business won the day.

Also like Universal, Sony will need to clear the necessary regulatory hurdles before they can take ownership of EMI Music Publishing. And until that regulatory process is complete, as I said earlier today, EMI will continue to look much as it does today, possibly past the end of our fiscal year. That means continuing to operate our business to the very best of our abilities, and fighting constantly to provide the best possible outcomes for our artists and our writers. That is what they deserve, and that is what we’re going to give them, no matter what.

I have attached to this note a set of Q&As that will at least address some of the questions you may have, regardless of whether you are in EMI Music or EMI Music Publishing. Over the next few days and weeks Leo and I will try to visit with as many of you as we can to answer your questions and concerns. And for those who we don’t get to see personally we will be sure to update you by email. You should also feel free to email me with any questions that you don’t get a chance to ask in person.

As I mentioned before, over the next months, each and every one of us will have an important part to play in cementing the legacy of EMI through our actions. We have created a new way of doing things, predicated on passion, humanity and integrity. And regardless of the nature of our ownership, I believe that all of us will continue to hold that important to us as we move forward.

Best wishes
Roger

The Q&A Briefing

1. What specifically needs to be done before the businesses actually change ownership? And, who will be involved in that work?Amongst the work streams which need to come together to actually transfer ownership of the two businesses there are three of particular note:

First we need to achieve legal separation of the two businesses. That work is already well under way. A team led by Jade Moore has been appointed to implement the steps that need to be taken. She will coordinate with the finance directors and business affairs attorneys in each country. However there will need to be action by the boards of a number of companies to make this all come together. And, of course our central tax team will be intimately involved in this as well.

Second each of the buyers will be making application to the anti-trust regulators for clearance to complete their deal. Our responsibility will be to provide the buyers and regulators with the information they will need for those applications and any subsequent inquiries. Depending on the needs of the regulators, this is likely to involve a substantial effort on our part. As you can imagine the brunt of the effort will fall to the finance and legal and business affairs staffs. Overall this will be coordinated by Ruth and me. We will look to Kyla and Shane for RM and Clark and Claudia for MP to develop the information and respond to the inquiries.

On the MP side we have also agreed to help Sony with their plan to issue bonds as a part of the acquisition financing. This will involve providing them with a substantial amount of financial and operational information and it may require the separated MP company to provide audited accounts going back several years. So, once again the burden will largely fall to the finance teams.

2. Do both businesses need to complete at the same time? And, what happens if one completes before the other?
One of the two businesses may complete before the other. If it does it will be able to close at that time and not wait.

If there are any shared services between the two companies there will be a short period to allow them to wind down after the first business completes. Any further ongoing relationship will be determined by the two new owners.

3. How long will it take before each business will change ownership?
Given all that needs to be done it is likely that the process for both businesses will extend into the new fiscal year.

As the two deals will be examined separately, there is no certainty regarding which will complete first.

4. From now to completion will the way we run the company change? What limitations, if any, will we have on doing deals? Is there to be any change in delegated authorities?
Basically the business will be run in the same way we have been running it. We will continue to do deals, invest in our artists and songwriters, release and market our records, enter into licenses, etc – all of this independently from the buyers.

There will be some minor tweaks to the delegated authorities and our deal review procedures, but nothing substantial. Any specific changes to the delegated authorities and deal process will be communicated to those affected shortly.

5. What plans do each of the buyers have for each business?
The best way to understand their plans to read their comments in the press release announcing the sales. Beyond that the anti trust process imposes restrictions on what the buyer can say and do until they have received clearance.

This also means that the buyer is not allowed to give direction to the company and we are not to take direction.

6. Will we be required to interact with the buyer to plan for integration?
At some point, but not for some months. It is likely that the buyers for each of the businesses will want us to help them plan the integration of our business into theirs following completion. Again the anti-trust rules are very strict about how those consultations are to take place and the subjects they can cover. For that reason very few of us will be involved in this sort of work.

7. What can we discuss with the buyer?
We currently deal with both of these buyers as trading partners or competitors. And that is the way we will act up to the point of completion. Think about it this way nothing will change until they actually own the business and that cannot take place until the regulatory reviews are complete. So, if you swore at them before you can still do it, though I am not recommending that! If they were your friends they are still your friends. In other words interact with them just as you always have done.

What you cannot do is to share confidential information with them or take instructions from them. We run our show until completion.

Because this is such a delicate area we will be rolling out guidelines to ensure, as the anti-trust lawyers put it we don’t “jump the gun” during the transition period. Truly there are some very serious consequences for EMI if we screw this up.

8. Are there going to be layoffs?
During this transition period it is business as usual for us. That means we will continue to implement our current plans and drive the performance of the business. However, to be very clear we are not planning any transaction-related layoffs, in anticipation of the completion.

]]>http://www.completemusicupdate.com/article/roger-faxons-memo-to-staff-about-the-emi-sale/feed/0The end of an era – EMI assets sold to major label rivalshttp://www.completemusicupdate.com/article/the-end-of-an-era-emi-assets-sold-to-major-label-rivals/
http://www.completemusicupdate.com/article/the-end-of-an-era-emi-assets-sold-to-major-label-rivals/#commentsSat, 12 Nov 2011 07:38:17 +0000http://www.thecmuwebsite.com/?p=40796

In 2007, the last remaining British music major, then a plc listed in London, was bought by private equity group Terra Firma in an audacious multi-billion dollar deal.

Terra Firma and its top man Guy Hands immediately instigated dramatic cuts, correctly identifying many of the problems with the ailing music company, though struggling to come up with killer solutions. A cull of senior execs and A&Rs alienated artists in contract to the major, and many new recruits from outside the music business – brought in to reinvent the company – left after short tenures.

Though, despite the stresses and dramas, a leaner, fitter EMI emerged from the quagmire, seemingly able to meet the challenge of pursuing more innovative relationships with key artists, while selling its services to the growing number of other artists looking to go it alone. Once the long term boss of EMI Music Publishing, Roger Faxon, was put in charge of the whole group, things started to look good.

Except that by that point there were already new dramas behind the scenes, because the scheme under which Terra Firma had bought EMI in the first place was rapidly untangling. It had been an ambitious acquisition enabled by a multi-billion loan from one bank – Citigroup. It was a deal of its era, made impossible once the credit markets crashed and Citi was unable to sell on any of the debt.

The bank started getting tough, so that when EMI couldn’t meet the ambitious loan terms Terra Firma had saddled it with, Citi execs refused to compromise. Terra Firma repeatedly had to pump millions more into EMI to keep it on the right side of covenant tests, and the patience of Terra Firma’s backers started to be tested.

Nevertheless, somehow Hands managed to raise just enough money in summer 2010 to keep Citi from the door. We expected another crunch moment to come in spring 2011, but before that could happen Citigroup pounced, the holding company through which Terra Firma owned EMI declared itself unable to meet loan terms and the bank repossessed. Rumour has it Hands, who had already sued Citi over the advice the bank gave him ahead of his EMI acquisition, is now considering legal action over the way the company was seized from him.

Citi admitted immediately it had no intent of keeping hold of EMI in the long term, though it was early summer before formal takeover offers were being accepted. Faxon was keen to keep the company together as a going concern, telling every business journalist who would listen that EMI was strongest if its recordings and publishing businesses – traditional autonomous enterprises – could be more closely integrated. Citi initially indicated it would try to sell the company to one buyer, though with a desire to maximise return to cover pass losses made on the Terra Firma deal, it became clear a split sale was much more likely.

Prior to Terra Firma’s 2007 takeover everyone had expected Warner Music to merge with EMI, to create a super-major on par with Universal and Sony. Even before Citi repossessed, everyone thought Warner would still be a key bidder if and when EMI went back on the block, though the US major’s owners were unlikely to be able to afford the whole company. Consensus was Warner would bid for the labels, leaving the publishing catalogues for the acquisitive ‘version two’ BMG, which had access to big money via its co-owner KKR.

But when Warner Music itself was then put up for sale in early 2011, many were surprised by how many people put in bids, leading to speculation that there would be a lot more competition for EMI as well. Though, in the end, there were only ever four serious bidders once Citigroup opened talks on an EMI sale – the expected Warner Music (now a little richer thanks to its new owners) and BMG (still acquisitive), plus the other big two existing players in music, Universal and Sony, both of whom seemed confident they could cross the regulatory hurdles that would have likely blocked such deals ten years ago on competition grounds.

On the publishing side BMG and Sony were equal favourites, though the latter was relying on finding partners to help fund the bid. On recordings, Universal, the surprise entrant in the race, got ahead at first, but then Warner put in a higher bid, so Universal stepped down, until Warner likewise withdrew its offer, concerned about EMI’s pension liabilities. Allowing Universal to return to the negotiating table.

Bringing us to yesterday – the announcement that Universal and Sony/ATV will get EMI Music and EMI Music Publishing respectively. Both are likely to face regulator investigations, and pan-European indie labels body IMPALA has already pledged to fight both deals. But assuming that they do ultimately go through – albeit with possible remedies – what does this mean for the EMI name and legacy? Set to be absorbed by existing major players, the 80 year old British music firm will definitely cease to be British, and may ultimately cease to exist even in name.

Dublin-based music video platform MUZU has announced a new partnership with Sony Home Entertainment in Europe which will bring the pop promo service into the living room via the previously reported Sony Entertainment Network, the consumer electronics firm’s digital content network that once went by the rather ridiculous name of Qriocity.

Via the partnership, subscribers will be able to access free music videos via Sony Bravia TVs and Blu-Ray players, and the firm’s web-TV Network Media Players. The new partnership further expands MUZU’s reach beyond the net-connected-PC, them already having a partnership with Samsung and a deal with Microsoft’s Xbox division in the pipeline.

Confirming the new deal, Sony Europe’s Edd Uzzell told CMU: “As one of the largest digital entertainment services, Sony Entertainment Network aims to bring new ways for consumers to enjoy music, movies, games and more. By continuing to add new and exciting partners such as MUZU, we feel we are perfectly complimenting the existing music services we prove, giving our customers a wealth of choice for enjoying music content whenever they want it”.

MUZU CEO Ciaran Bollard added: “Owning this space is strategically important to MUZU and being selected as the partner for Sony Entertainment Network across Europe adds a huge boost to this goal. MUZU consumers can now access and enjoy music through our services on TVs through three major partners including Sony”.

]]>http://www.completemusicupdate.com/article/muzu-announces-partnership-with-sony-network/feed/0IMPALA calls on EU to explore options for intervening on any Sony or Universal acquisition of EMIhttp://www.completemusicupdate.com/article/impala-calls-on-eu-to-explore-options-for-intervening-on-any-sony-or-universal-acquisition-of-emi/
http://www.completemusicupdate.com/article/impala-calls-on-eu-to-explore-options-for-intervening-on-any-sony-or-universal-acquisition-of-emi/#commentsWed, 09 Nov 2011 11:03:43 +0000http://www.thecmuwebsite.com/?p=40566

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Pan-European indie label trade body IMPALA has announced it will formally oppose any attempt by Sony to buy the EMI music publishing company and/or Universal to buy the EMI record labels.

Sony/ATV is known to be competing with BMG to buy EMI Music Publishing, while sources say that Universal – which withdrew from the bidding for the EMI record companies recently – is now back at the negotiating table. Vivendi-owned Universal and the Sony Corp’s combined music assets – including wholly owned Sony Music and publishing JV Sony/ATV – are the two biggest music companies in the world, and IMPALA argues it would be bad for the wider music industry for the two big operators to get even bigger via the break up of the smaller British music major.

With that in mind, the trade body confirmed yesterday that it has asked the European Commission to investigate “all possible options to intervene” should Sony or Universal be successful in bidding for a sizable slice of the EMI business. Assuming competition regulators took an interest in either or both a Universal or Sony purchase of one half of EMI, and it is likely they would, IMPALA will clearly lobby hard for both to be blocked. It’s known that the regulatory costs and risks associated with a Universal or Sony purchase of EMI, and specifically who should actually take that risk, has been discussed by Citigroup and both the potential buyers, the US bank being keen to minimise its exposure.

Interestingly, if it is Warner which is successful in bidding for the EMI labels – and although it too formally withdrew from the bidding last week, informal talks between the US major and Citigroup are said to be ongoing – IMPALA will push for ‘remedies’ rather than an all out blocking of the deal.

The possibility of an EMI/Warner merger has been on the table before, of course. There is an argument that the two smaller major music companies merging would actually be a good thing, because a combined EMI/Warner would be more able to take on Universal and Sony, and would mean three rather than two uber major players in the market.

That partly explains IMPALA’s more flexible approach to a possible Warner deal with Citigroup, though the organisation would still be looking for the kind of concessions offered by then Warner CEO Edgar Bronfman Jr back in 2007, the last time a merger of Warner and EMI was seriously on the table.

Although no longer CEO, Bronfman is still spearheading Warner’s EMI takeover ambitions, and he may well be willing to negotiate with IMPALA again to reduce opposition during any competition regulator investigation, though as this time Warner would only be buying EMI’s labels, not the whole company, he might feel less of a need to win friends in the indie sector.

Restating IMPALA’s position on all this, the body’s Executive Chair Helen Smith told CMU: “We have always said our position is no mergers without remedies and we know from 2007 that it is possible to find a solution which is far-reaching enough. Our problem with Universal, however, is that we believe it is simply too big already to be allowed to gain more power and we have the same concerns over Sony buying EMI publishing. Making such a duopoly more powerful goes completely against the basic principles of competition in cultural markets”.

Sony Corp lost a neat £216 million in the most recent financial quarter, leading the electronics and entertainment giant to revise its year-end estimates to a £719 million loss. It will be the fourth consecutive year that the conglom has made a loss overall.

Currency fluctuations continue to cause problems for the Sony empire, which invariably sees its international revenues reduced once converted into the frequently strong Japanese Yen, and natural disasters in both the firm’s home country and Thailand have impacted on operations adding to costs. Though disappointing performances in some Sony divisions are also partly to blame for the company’s overall losses, lower than expected TV sales being a particular problem this year.

Apple remains a major thorn in Sony’s side, stealing market share in PCs, smartphones and music devices, and, of course, Sony’s own efforts to strengthen its position in the cross-device digital entertainment space were hindered earlier this year by the embarrassing security breach of its servers, causing private data of those signed up to the Sony gaming and entertainment networks to spill.

Although not the biggest concern in the wider Sony empire, the firm’s music company saw sales decline 6.6% year on year for the most recent quarter, with revenues of $1.34 billion. The company blamed continued declining album sales, especially outside the US, for the revenue drop. The biggest selling artists for the major during the quarter were Beyonce and Adele, the latter – signed to indie XL of course – being distributed by Sony’s Columbia in America.

Apple having well and truly shaken up the market in the last five years, the smartphone industry now looks set to enter a new era as the third of the traditional big players in the handset space announced a corporate rejig yesterday.

Nokia having thrown out a lot of the old to strike up a new partnership with Microsoft, and Google having taken ownership of the Motorola phone firm as part of the Android revolution, now Sony Corp has taken complete ownership of its mobile maker, Sony Ericsson, buying Swedish telco Ericcson out of the firm in a billion pound deal.

The move is seemingly part of Sony’s bid to have a more integrated approach in the sale of its various consumer electronic devices – so phones, PCs, TVs, games consoles and tablets – all of which increasingly provide access to the same content and services.

Sony was now the company, the Corp’s supremo Howard Stringer said when confirming the Ericcson deal yesterday, which could truly let customers connect with content “wherever they are, whenever they want”. Which is almost true, though I was always promised that my kitchen would become net-connected via my fridge, and I don’t see Sony helping me out there just yet.

Sony Corp announced yesterday that it was suspending 93,000 accounts across its Sony Entertainment Network (until last month known as Qriocity), PlayStation Network and Sony Online Entertainment networks, after fraudulent attempts were made to log into them. Passwords on all these accounts will have to be changed, or other details may have to be validated before users can access them again.

In a post on the official PlayStation blog, Sony’s Chief Information Security Officer Philip Reitinger said: “These attempts appear to [utilise] a large amount of data obtained from one or more compromised lists from other companies, sites or other sources. Given that the data tested against our network consisted of sign-in ID-password pairs, and that the overwhelming majority of the pairs resulted in failed matching attempts, it is likely the data came from another source and not from our [own] networks. We have taken steps to mitigate the activity”. He added that “less than one tenth of one percent of our PSN, SEN and SOE audience may have been affected”.

As previously reported, Sony revealed in April that user information held by the company’s PlayStation Network and its Qriocity music service had been accessed by a hacker, who had stolen a great deal of personal information, possibly including credit card numbers. Access to both the PlayStation Network and Qriocity was suspended on 20 Apr, with users notified that this was due to an “external intrusion” two days later, though the database compromise was only announced when it was uncovered by a security firm assessing the scale of the attack. Sony’s management of and communication during the hacking attack were widely criticised.

Sony blamed hacker group Anonymous for that data grab, because it happened while the conglom’s security teams were dealing with one of the group’s largely pointless Distributed Denial Of Service attacks. Various Sony websites have been victims of the increased trend of late among hacking communities to stage DDoS and other hacking attacks against companies they believe too draconically enforce their copyrights. Some recent arrests of alleged Anonymous members have related to attacks on Sony’s servers.

Also suffering network problems at the moment, of course, is Blackberry, whose servers have also been up and down this week, leaving users without access to emails and that BBM messenger thing (which will be why there have been no riots in the last few days). Similar bad management and poor communication by Blackberry owner RIM during its network crisis has led to speculation it too is dealing with, and hiding, a hacking attack and possible data grab, though RIM has denied this is the case, and techie experts seem to think the phone firm’s alternative explanation is more plausible.

EMI’s four main music business rivals and the conglom headed up by billionaire Ronald Perelman are expected to be the five organisations which present final bids for EMI on Wednesday, or at least that’s what sources are telling the Financial Times and other financial media.

As previously reported, Citigroup, which put EMI up for sale in early summer having repossessed the music firm from previous owner Terra Firma in February, has set a 5 Oct deadline for final offers. Although various billionaires and private equity consortiums have considered making a bid, insiders reckon that, at the final hurdle, there will be less interest from outside the existing music industry than there was when Warner Music was on the block earlier this year. Sony, Universal, Warner, BMG and Perelman’s MacAndrews & Forbes are expected to make final offers for some or all of EMI.

It is thought that Sony, whose music publishing company Sony/ATV will make the bid, is only interested in EMI Music Publishing, while Universal Music will only bid for the EMI record labels. According to the FT, both BMG and Warner Music were still considering a bid for EMI in its entirety as of the end of last week, though both might ultimately put in offers for just half of the company, BMG most likely going for publishing (despite their CEO once indicating an interest in the recordings catalogue) and Warner for the EMI Music record labels.

It is thought that Perelman too is only interested in taking one half of the company, though he is of two minds as to which half. When Warner was up for sale he collaborated with Sony/ATV on a bid, the plan being that Perelman’s business would take the labels and the Sony subsidiary the publishing catalogue. It’s thought the billionaire is still considering a similar partnership on this bid. Another option would be to buy EMI outright, but licence the entire publishing or recordings catalogue to another music company.

Some commentators still reckon that the consortium led by Ron Burkle that bid for Warner Music – which included Napster and Facebook co-founder Sean Parker – might also make a last minute bid. Certainly the New York Post seemed certain that was on the cards last week. However, with the Burkle bid an outside possibility, and Perelman seemingly not interested in operating the EMI Group in it’s entirety should his bid be successful, the chances of the sale resulting in considerable change at EMI now seem high.

It’s known current EMI boss Roger Faxon is keen for the publishing and recordings businesses to stay in common ownership, but this is now most likely to happen if Warner or BMG win the bidding, but either of those deals would result in EMI’s various divisions being integrated in with the bidder’s existing operations. Though either transaction might enable Faxon himself to keep his job, Warner’s executive structure is still in a state of flux following its sale earlier this year, while BMG – focused, as it is, primarily on publishing rights – might recognise the value of having Faxon, and his vast experience in music publishing, on board.

That said, there is another option. Although Citigroup is keen to sell EMI soon, insiders there say that doesn’t mean the US bank is treating this as a fire sale, if the right price isn’t on the table it’ll seriously consider postponing the sale until when the wider economic climate is looking more rosey. That might enable the independent or private equity bidders who have fallen out of the race this time to return to the table with a deal more likely to keep EMI in tact as a going concern.

Though if the right deal or deals are on the table come Wednesday, it’s thought an announcement could be made on a sale within two weeks.

Ten years ago tech-savvy students were taking content that belonged to entertainment giants and dishing it out to all and sundry for free. These days they are hacking into the IT systems of said entertainment giants, leaking data and forcing networks offline. If you’re caught, the former can result in being forced to pay six figure damages. The latter can get you fifteen years in jail. Come back Kazaa, all is forgiven.

So, yes, a college student from Arizona has been charged over allegations he was one of the hackers who attacked computer systems owned by Sony Corp, though not the big data grab against the entertainment firm’s PlayStation and streaming content networks, but another smaller attack against the servers of Sony Pictures Entertainment, during which private data relating to 37,000 customers was taken.

The attack on the servers of the Sony film company was claimed by the LulzSec group, so presumably the authorities believe 23 year old Cody Kretsinger is part of or affiliated to that supposedly now retired network of hackers. He’s been charged with both conspiracy and unauthorised impairment of a protected computer, which together could result in fifteen years jail time if he were to be found guilty.

There have been various arrests in both the US and UK this summer of people believed to be part of or linked to LulzSec, or that other notable hacking party Anonymous, while authorities in some other countries have also arrested people believed to be linked to other hacking groups who have together pursued a particularly prolific campaign in the last twelve months designed to take down the IT systems of organisations they believe to be impeaching freedom of speech or to be enforcing copyrights too forcefully.

Sony Corp is facing another tricky PR challenge as tech blogs and news sites around the world note a change to the terms of service attached to the electronic and entertainment giant’s PlayStation Network and Sony Entertainment Network, the latter the new name for the recently rebranded Qriocity service.

Under the new terms, users must commit to not participate in any class action lawsuits regarding any future security breaches on the Sony network. As users have to accept the new terms in order to log on to the Sony system, and given that many will do so without even reading the new conditions, some have criticised the change. Though given that one class action lawsuit launched in the US earlier this year, after that very high profile data spill on the Sony network, could cost the firm billions, some bad press now to reduce the impact of future action is probably worth it.

Under the new terms, if users felt they had suffered damage due to a future security lapse on the Sony network, they would have to pursue their own individual case against the electronics firm – initially via a Sony selected arbitrator – rather than relying on others to launch a so called class action suit where they too could win compensation if the litigation is successful, even though they are not directly participating in the legal case. The new terms will mainly affect users in America, where class actions are most common, though similar collective action systems do exist in some other jurisdictions, including some in mainland Europe.

Users can actually opt out of the new anti-collective-action term, though to do so they must send a letter (not an email) to Sony Entertainment’s LA headquarters. And critics say that most users won’t be bothered to that, or even get as far as reading the small print in the new user agreement that details the opt out option.

According to the BBC, a class action lawsuit filed against Sony in the US in April relating to the big data spill could cost the firm billions, despite the company having already offered compensation packages to the 100 million plus users worldwide whose personal information was leaked during one of several hacking attacks on the company’s servers. The most severe attack, of course, led to the PlayStation Network being offline for 40 days. At the time Sony was criticised for how long it took to admit that so much personal data had been leaked.

Sony is scrapping its Qriocity brand, just over a year after it launched. Possibly because so many people were confused as to how it was meant to be pronounced. Or possibly because it turned out no one was actually all that curious about on-demand digital content after all.

Or possibly because each Qriocity service ended up with a ridiculously long name, eg Music Unlimited power by Qriocity. Or possibly because Sony chiefs think the Qriocity name has become tarnished because of that embarrassing private data spill earlier this year, though that was more associated with the much bigger Sony PlayStation Network in the press.

Anyway, from this point onwards Sony’s Qriocity entertainment network will be known as, erm, the Sony Entertainment Network. And it’s streaming music bit, Music Unlimited, will be known as, well, Music Unlimited. So well done to whichever branding agency was probably paid handsomely for coming up with the Qriocity name.

So, a good recent financial quarter for Sony Music, then. News that contrasts with its parent company Sony Corp, which had a horrible three months. The major’s revenue was up by 7% to $1.35 billion (though that increase is lost to the system once transferred from dollars to yen), while profits were up 61%, partly due to some strong releases, partly due to Sony’s cut of the LimeWire settlement struck in May.

Sony Corp, however, posted a $199 million loss for the quarter. The data-spill that forced the closure, for a time, of the PlayStation Network played its part in the company’s misfortune, though so did the general economic impact of the earthquake and tsunami that hit home country Japan earlier this year.

]]>http://www.completemusicupdate.com/article/sony-music-profits-up-but-sony-corp-makes-big-losses/feed/0Sony moves to have This Is It footage removed from Murray trialhttp://www.completemusicupdate.com/article/sony-moves-to-have-this-is-it-footage-removed-from-murray-trial/
http://www.completemusicupdate.com/article/sony-moves-to-have-this-is-it-footage-removed-from-murray-trial/#commentsMon, 25 Jul 2011 11:17:44 +0000http://www.thecmuwebsite.com/?p=33349

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The Sony film company has asked the judge hearing the Conrad Murray manslaughter case to scrap plans to show outtakes from the ‘This Is It’ movie during the doctor’s trial later this year.

As previously reported, originally it was Murray’s defence team who requested to see footage recorded by AEG Live at rehearsals for Michael Jackson’s fated ‘This Is It’ live show, believing it may show the late king of pop was in poor health in the weeks before his death. Sony Studios now control that content because they secured the rights to transform some of it into the ‘This Is It’ movie.

The company objected to the idea of lawyers getting access to the unused film, and even more so to proposals it be shown in court, arguing it would reduce the value of the footage, which might be used for future documentary releases. However, Sony was ordered to let reps for both the defence and prosecution see the footage onsite at its studios.

As it turned out, it was the prosecution who subsequently requested to show more of that footage when the case goes to trial in September, with the defence admitting last week that the backstage recordings don’t really give any indication as to Jackson’s state of health.

Sony has leapt on that admission and called for Judge Michael Pastor to axe plans to screen any of the footage during the trial, arguing that doing so would be a waste of the court’s time. Pastor had originally planned to visit Sony’s studios himself to view the footage, though he cancelled those plans this weekend, saying he had seen clips of the sixteen hours of film lawyers had deemed relevant, and felt he could make a decision one way or another based on those clips alone. That decision should follow early this week.

Murray, of course, is accused of causing Michael Jackson’s untimely death two years ago by negligently administering the drug propofol. Murray’s people are expected to claim Jackson self-administered the fatal dose of the drug.

Sony Electronics has announced it will stop making MiniDisc Walkman devices, as the 1990s audio format continues it albeit much slower than you might have expected demise in the age of digital and mega-capacity digital music players.

There is currently only one portable MiniDisc player on the market, and that too is about to be canned. Consumers still using MiniDisc devices will still be able to buy actual MiniDiscs, while a non-portable MiniDisc player will still be manufactured in some markets.

The downsizing of the MiniDisc range follows an announcement by Sony last year that cassette Walkmans would stop being manufactured in the US (where apparently some were still being sold), although they are still being made in China.

Universal Music is the latest major content owner to become a target of those pesky ‘look at us, aren’t we clever’ computer hackers. A seemingly new group of cyber-attackers have released a load of data, including logins and passwords, apparently taken from Universal Music’s servers. The data dump also includes similar information from the servers of MTV owners Viacom.

It seems unlikely this data breach is anywhere near as big as that suffered by Sony Corp when its PlayStation Network and Qriocity systems were hacked, making public all sorts of password and credit card information and forcing both networks to be shut down for a time. Sony Corp boss Howard Stringer had a very hard time at a recent AGM where the embarrassing data hack was one of the topics for discussion, with at least one shareholder blaming the data breach in part for the entertainment and electronics company’s continued poor financial performance.

At the same AGM it was confirmed Stringer would be getting a lower pay packet this year because the conglom he leads has posted losses for three consecutive years. Though he was still paid $4.27 million, so I don’t think we need to organise a whip round for him or anything.

An online group which targeted, among others, various Sony businesses with some of those trendy Distributed Denial Of Service attacks, has said it has shut itself down not because the authorities are closing in on its members, but because they’ve got bored of the whole DDoS thing.

After an online announcement that they were disbanding, a member of the informal group of cyber-attackers LulzSec told the Associated Press: “We’re not quitting because we’re afraid of law enforcement. The press are getting bored of us, and we’re getting bored of us”. It has to be said computer hackers are in the main pretty boring. Apart from Matthew Broderick in ‘War Games’, obviously.

As previously reported, Essex geek Ryan Cleary, who was arrested last week for targeting various websites with DDoS attacks, including record label trade bodies the BPI and IFPI, was linked to the LulzSec community, though they denied he was part of their group.

Indie label digital rights agency Merlin has signed up to Sony’s Music Unlimited service, the entertainment giant’s subscription-based cross-device Spotify competitor that operates under the ridiculous Qriocity brand.

Says Merlin chief Charles Caldas: “We are very excited to see the evolution of innovative cloud-based digital music services like Music Unlimited powered by Qriocity in the digital market bringing music to millions of people around the world on a wide range of connected devices. With the addition of our members’ artists’ repertoire to the catalogue, and the global reach of Sony, we believe that this service is well placed to attract a large amount of consumers, generating legitimate revenue for rights holders and taking digital music consumption to the next level of mass market appeal”.

Meanwhile Jeff Hughes of Omnifone, who operate the Sony service, told CMU: “Having Merlin within the Music Unlimited powered by Qriocity global catalogue provides the independent repertoire that dominates the charts in several markets, making Merlin a valuable component of any global music service”.

Sony has released a new app that makes its Music UnLimited service available to users of Android-powered phones.

As previously reported, the music bit of Sony’s on-demand Qriocity platform launched in the UK late last year, and is now available in the US, Australia, New Zealand and various European countries too. The service was hindered when it was hit by the same data breach as the Sony PlayStation Network, though Sony says the Qriocity network is now fully operational again everywhere except Japan.

The new app means the service, which offers a Spotify-style streaming experience to paying subscribers via PCs, PlayStations and net connected Sony TVs and Blu-ray players, will also work on any Android phones.

Spanish police have arrested three suspected members of the Anonymous group over allegations they were involved in the cyber-attacks on Sony’s PlayStation Network.

As previously reported, Sony’s online gaming network was offline for sometime after someone hacked into the service’s user data files while the Anonymous group were busy staging one of their Distributed Denial Of Service attacks, presumably over Sony’s involvement in various copyright lawsuits. Anonymous distanced themselves from the actual hack, which included the accessing of passwords and credit card information, but admitted it had instigated the DDoS attack. Similar attacks on various Sony owned websites around the world have since followed.

Spanish authorities said the three ‘hacktivists’ were suspected of being involved in online activity designed to bring down the web operations of Sony plus two Spanish banks and an Italian energy group. Anonymous usually target companies who are seen to be overly protective of intellectual property rights or who are infringing freedom of speech in some way. Predictably, websites linked to the Spanish authorities were named as new targets on Friday.

Sony Corp yesterday blamed the online community Anonymous for last month’s data breach in which the personal information of over 100 million users of the PlayStation Network and Qriocity content-on-demand service was stolen. As previously reported, Sony admitted last week that the reason both services had gone offline somewhat suddenly the previous week was because of a major hack that had resulted in the theft of significant amounts of user data, likely including credit card information.

Sony isn’t saying that members of the Anonymous network stole the data, but that the online pressure group was staging one of those tedious Distributed Denial Of Service attacks against the Sony immediately before the big hack, and that it was because the company’s IT dudes were dealing with the DDoS attack that the data grab was able to happen through the back door.

It made the claim that Anonymous contributed towards the data breach in a letter to Congress yesterday, as the entertainment and electronics giant faces questions from US political types regarding its security systems and response to the data hack. Anonymous subsequently issued a lengthy statement admitting they were attacking Sony’s servers in the run up to the data grab, but added that as a group they has never been involved in credit card theft. They then waffled on for a while about how Sony and the FBI are evil, while everyone involved with Anonymous is brillz skillz.

Aside for the reputation hit Sony has taken as a result of the data hack, and the loss in revenues caused by having to take its networks down for over a week, the conglom may face greater costs if the data theft results in credit card fraud. One American web security analyst, Michael Pachter, told Billboard that Sony should have emailed all the users of its networks by now promising to indemnify them against any financial harm resulting from the data breach.

It’s a viewpoint that is likely to be supported by some in US Congress, meaning the pressure will only mount on Sony in the coming days to step up its response to the big hack.

Sony has revealed that user information on the company’s PlayStation Network and its Qriocity music service was accessed by a hacker last week, including a great deal of personal information, possibly including credit card numbers.

Access to both the PlayStation Network and Qriocity were suspended on 20 Apr, with users notified that this was due to an “external intrusion” two days later, but the database compromise was only announced yesterday when it was uncovered by a security firm assessing the scale of the attack. It’s not clear how many accounts were stolen, but it is estimated that PSN and Qriocity collectively have up to 79 million users.

Qriocity, of course, powers Sony Entertainment’s Music Unlimited service, which launched in the UK and Europe last year, followed by the US, Australia and New Zealand in February, and provides streaming music through any net-connected Sony device. The PlayStation Network meanwhile allows PS3 and PSP console users to play multiplayer games online, plus gives access to a variety of services including the PlayStation Store, LoveFilm, VidZone and the BBC iPlayer.

In an email to users, Sony said: “We have discovered that between 17 Apr and 19 Apr 2011, certain PlayStation Network and Qriocity service user account information was compromised in connection with an illegal and unauthorised intrusion into our network … Although we are still investigating the details of this incident, we believe that an unauthorised person has obtained the following information that you provided: name, address, country, email address, birthdate, PlayStation Network/Qriocity passwords and login, and handle/PSN online ID. It is also possible that your profile data, including purchase history and billing address, and your PlayStation Network/Qriocity password security answers may have been obtained”.

Adding that there was “no evidence that credit card data was taken at this time”, the company admitted that it “cannot rule out the possibility”, saying that credit card numbers and expiry dates (though not the cards’ security codes) could have been stolen.

Many users expressed anger that it had taken so long for Sony to inform them that their personal data had been compromised. The company this morning assured users that it had not withheld news of the breach from them, saying: “There’s a difference in timing between when we identified there was an intrusion and when we learned of consumers’ data being compromised. We learned there was an intrusion 19 Apr and subsequently shut the services down. We then brought in outside experts to help us learn how the intrusion occurred and to conduct an investigation to determine the nature and scope of the incident. It was necessary to conduct several days of forensic analysis, and it took our experts until yesterday to understand the scope of the breach. We then shared that information with our consumers and announced it publicly yesterday evening”.

Despite these assurances, many users are understandably still upset at the company’s handling of the situation, and the fact that it was possible for hackers to gain access to the PSN databases at all. And the repercussions from this incident may have longer term effects.

Security firm Sophos’ senior technology consultant Graham Cluley told the BBC: “This is a big one. The PlayStation Network is a real consumer product. It is in lots of homes all over the world. The impact of this could be much greater than your typical internet hack. Some people will use the same passwords on other sites. If I was a hacker right now, I would be taking those email addresses and trying those passwords”.

Of course, the hacker in question has already had over a week to begin doing just that. Sony urged user “to be especially aware of email, telephone, and postal mail scams that ask for personal or sensitive information”, but, as Cluley noted, the potential for someone to gain access to accounts on other unrelated services remains a concern, too.

Online security and identity theft consultant Robert Siciliano told The Telegraph: “If the bad guys have [username and password] information, they can use it to access social networking and banking accounts, and that’s where the problems begin. They can log into your email and change the password and go through looking for other accounts. There’s no end to what they can do. There’s enough data that the bad guys can turn that into cash with relative ease”.

Currently the PlayStation Network and Qriocity remain down, with Sony unable to comment on when they might return. This morning users were told: “We are taking the investigation seriously. We will keep the service down to allow us to conduct a thorough investigation and verify smooth operation of our network services but are working hard to resume the services as soon as we can be reasonably assured security concerns are addressed”.

Presumably other online services with large user databases are assessing their security procedures as we speak. I hope they are, anyway.

Japanese music company Hostess, which represents numerous European independent artists and labels in the Japanese market, has announced it is renewing its partnerships with Sony, which provides some distribution and digital marketing services to the indie.

Hostess say that being able to tap into Sony’s networks has brought many benefits to the artists it represents, including increased market reach, and a joint effort in the sync domain which has scored Hostess-represented artists some lucrative deals.

Maintaining its partnership with Sony, however, has cost Hostess its relationship with UK-based indie label services business Cooperative Music which is, of course, now part of Universal. Cooperative has decided to use the distribution and marketing networks of Universal’s own Japanese division rather than to continue to work with Hostess and, therefore by association, rivals Sony.

Hostess CEO Andrew Lazonby told CMU: “Renewal of these service partnership deals [with Sony] was never in any real doubt, and with a few minor tweaks happily applied we’re very much looking forward to building on what has been a rewarding first two years working together”.

He continued: “Whilst it is a shame to have to relinquish our Cooperative contract at this time, changing our service partner in Japan was never going to be an option for Hostess and we do understand Universal Music Group International’s wish to now release it’s repertoire through it’s own company Universal Music LLC (Japan). We wish the Co-op management all the very best for their future business with Universal in Japan”.

Some people like both sport and music you know, as crazy as that might seem. And with that in mind Sony and Universal’s YouTube-powered music video service VEVO is launching some bespoke content in the US called Artists vs Athletes which will see sportsman who play for America’s NBA basketball league interviewing musicians.

The specifics are tbc, though we do know Landy Fields of the New York Knicks will interview Def Jam signed rapper Fabolous. It is also thought the series of interviews will be made available via VEVO around the NBA playoffs in April and May, while talks are underway that might see US TV network TNT air edited versions of the sport-meets-music videos during their NBA coverage.

Although initially focused on basketball, if successful it is thought VEVO hope to create similar content involving other sports. It is thought that as well as providing a good promotional tool for the video service, VEVO hope their sporty content will be attractive to brands, creating sponsorship revenue for them, their music company partners and participating sports organisations.

VEVO is expected to launch in the UK this spring. No word on whether there’ll be any ‘sportsman interview artists’ here. Perhaps Ashley Cole could interview Cheryl Cole. I’d tune into that.

]]>http://www.completemusicupdate.com/article/vevo-goes-sporty/feed/0Qriocity music launches in US and down underhttp://www.completemusicupdate.com/article/qriocity-music-launches-in-us-and-down-under/
http://www.completemusicupdate.com/article/qriocity-music-launches-in-us-and-down-under/#commentsFri, 18 Feb 2011 11:08:07 +0000http://www.thecmuwebsite.com/?p=23617

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Sony yesterday launched its streaming music service, the always snappy to say Music Unlimited powered by Qriocity, in the US, Australia and New Zealand. As previously reported, the streaming music service, which works on most net-connected Sony devices, launched in the UK in December and elsewhere in Europe last month.

Meanwhile, a Sony spokesman has denied that Sony Music is considering pulling its content from iTunes. As previously reported, the CEO of Sony Computer Entertainment Australia, Michael Ephraim, recently predicted the rise of streaming music services like Qriocity and observed that could overcome the dominance of Apple in the digital music space. But his comments were widely reported as Sony considering withdrawing from the iTunes store.

Sony Network Entertainment’s COO in the US, Shawn Layden, clarified the situation this week, telling reporters: “Sony Music, as I understand it, has no intention of withdrawing from iTunes, they’re one of our biggest partners in the digital domain. I think those words were either taken out of context or the person who spoke them was unclear on the circumstances”.

Sony Corp saw its operating income slip 5.9% year on year during the last quarter of 2010. Although sales were down in many Sony divisions and that played its part, much of the fall in profit can actually be accounted for in currency fluctuations between the dollar and the yen.

Revenues at Sony Pictures and TV sales for the Sony electronics business were both down, while the gaming side of the company had yet another good quarter. Sony Music was also one of the declining revenue units, with sales down 14.5 percent to despite good performing releases from Michael Jackson, Susan Boyle, Bruce Springsteen and the ‘Glee’ franchise.

Sony Corp’s disk manufacturing business Sony DADC has announced it is closing one of its key North American CD pressing plants in the New Jersey area of Pitman. 300 jobs will go, with the factories CD manufacturing output moved to the company’s Indiana base.

Of course the decline in CD sales is widely documented, and has been impacting on the manufacturing side of the business for sometime. Though that doesn’t necessarily make it any easier on the 300 people soon to be out of work.

So, Sony launched the music strand of its previously reported and stupidly named content-on-demand platform Qriocity just before Christmas here in the UK. Going by the snappy name of ‘Music Unlimited powered by Qriocity’, the new streaming music service is actually powered by London-based Omnifone and offers access to about six million tracks from the four majors and some indies.

It can be accessed by paying Qriocity subscribers on any net-connected Sony device, including Bravia TVs, Blu-Ray players, PS3s and VAIO computers. Portable Sony devices and Android phones will also be able to tap into the streaming service in due course.

Sony’s Kazuo Hirai told reporters: “As we start to expand Qriocity globally, these services ‘powered by Qriocity’ offer a single ID log-in and wallet solution, and empower users to easily consume content including music and video across a growing number of integrated devices. Seamless accessibility to content through these fresh user experiences will enrich Sony’s network service offerings and continually add value to the unique aspects of Sony’s network-enabled products”.

A basic subscription is available for £3.99, with a ten pound premium option also available. Having launched in the UK and Ireland, roll out in North America, Australasia and other European territories will follow later this year.

According to Reuters, Sony Corp has held early talks with outgoing Universal Music big cheese Doug Morris about him taking over as top man at Sony Music.

As previously reported, rumours of Morris moving to Sony emerged last week following the news another contender for the top job at Sony Music, Barry Weiss, who heads up Sony’s RCA/Jive division, had announced he was heading to Morris’ current haunt to join Doug’s successor in the Universal CEO role, Lucian Grainge. It seems certain Weiss decided to jump ship having come to the conclusion the Sony Music CEO role would not go to him.

The role of Sony Music chief is up for grabs because the incumbent, Rolf Schmidt Holtz, completes his current contract with the major next March. Weiss and his counterpart atop the other big Sony Music division in the US, Columbia/Epic boss Rob Stringer, have long been considered favourites to succeed the current Sony chief.

One problem for Stringer – other than recent articles in some US media remarking on what a disaster his time running Columbia/Epic has been – is that his brother Howard is top man at parent company Sony Corp. And sometimes family connections can go against you, in that, some insiders say, the Sony Corp board won’t want to be seen to be employing nepotism when appointing the new top man for their record company.

Another problem for both Stringer and Weiss is that they each respectively represent the old Sony and old BMG camps within the company that was, for a time, SonyBMG. The merger of the Sony and BMG record companies in 2004 was something of a disaster and the tensions it created remain, especially in the American wing of the business where the two main operating divisions still represent the old merged companies – Stringer running the old Sony labels, Weiss the old BMG labels.

Although Sony subsequently bought BMG out of the merged major, rebranding as Sony Music, the old BMG camp are still influential within the US business, partly because Schmidt Holtz came from BMG, and partly because Simon Cowell – through whom SonyBMG enjoyed the lucrative ‘Idol’ partnership in the US and the wider Syco partnership in the UK – was ex-BMG too. Promoting former BMG man Weiss would be seen by some as a continuation of the old BMG team’s dominance, a promotion for Stringer could be spun as the Sony camp retaking political control of the Sony record company. Neither is ideal for internal politics.

Which, some argue, is why Howard Stringer and Sony Corp recognise bringing in someone from outside Sony Music could be beneficial. As previously reported, the New York Post recently reported that a favourite was Marty Bandier, boss of Sony’s music publishing company. But insiders say he is not keen on making the move from publishing into recordings and, unlike his former colleague at EMI, Roger Faxon, who now heads up both publishing and recordings, Bandier would have to pick one or the other. Sony don’t own the Sony/ATV publishing company outright, making a merger of the CEO roles at its two music businesses difficult, even if it would be sensible strategically.

Which brings us back to 72 year old Morris. He was meant to be handing over the reigns of Universal Music to the aforementioned Grainge to take the more backseat role of Chairman at the world’s biggest music company but, possibly because he’s decided the backseat isn’t so much fun, or possibly because of rumours of growing tensions between him and his successor, Reuter’s insider sources say Morris is seriously considering the Sony CEO job.

Morris isn’t the only contender on Sony Corp’s shortlist though, Reuters say. Another possible is Rob Wiesenthal, currently CFO of the Japanese firm’s USA division. Some reckon he and a promoted Rob Stringer could work in partnership at the top of Sony Music, though that is unlikely to hugely impress the ex-BMG brigade.

Sony Corp has announced that the music strand of its stupidly named content-on-demand service Qriocity will be available via the PSP handheld gaming device.

Sony launched Qriocity earlier this year in the US, with a European roll out under way, and it currently works on Sony PCs, TVs, Blu-ray players and Playstation 3 consoles. Initially the content on offer was video-based, but it was known a Spotify-style music service was in the pipeline too. And yesterday Sony said that that service – when it launches – will also be available on the portable PSP and, while a launch date is tbc, an upcoming firmware update will get the gaming devices ready for the music service.

Writing about the new Qriocity music service on the PSP blog this week, Sony’s Eric Lempel said: “This will allow users to access millions of songs stored and synchronised through the cloud. Users can discover new music through channels ‘personalised’ to their tastes on multiple devices and without the requirement to manage digital music files”.

While Apple was busy launching its new iTunes logo in San Francisco yesterday, rival Sony launched a whole new digital content service at a technology convention in Berlin.

Actually the new service, which goes by the stupid name of Qriocity, has been available in the US since April, but the whole thing will roll out into Europe this autumn, with additional content and devices added into the mix.

A subscription-based streaming service, Qriocity will offer both video and audio content on-demand which can be accessed via a range of Sony devices, including PlayStation 3 consoles, Bravia TVs, Blu-Ray players and Sony PCs. It launches with a film library, with a Spotify-style streaming music option due to be added later in the year.

Sony Europe President Fujio Nishida said: “Via Qriocity, Sony will deliver a variety of digital entertainment content and services… including video, music, game applications and e-books over time”.

It’s not Sony’s first attempt to get a slice of the digital music market, of course, though its original download service, Connect, only ever excited nine people and was quietly shut down in 2008. File formats and digital rights management constraints were always a big issue for Connect. In Australia and New Zealand, Sony more recently launched a more conventional MP3 download service called bandit.fm, which would complement the Qriocity service if it were to be rolled out globally.

In sort of related news, everyone seems to think Amazon is about to enter the streaming music and movie market too. Good times.

Sony Music’s revenues were up 1.3% year on year for the quarter ending 30 Jun to a rather lovely 110.3 billion yen, or $1.24 billion if you prefer (or £815 million in “proper money”). The ‘Glee’ franchise plus big releases from AC/DC, Usher and Kana Nishino all helped bring in the loot. Profits were up 39%, thanks in part to cuts in marketing and overhead costs, to 7.5 billion yen, or $84 million if you like (or £55.5 million in “real money”). So that’s all lovely.

It was a good first quarter for the whole of Sony Corp, which has been suffering quite a bit of late. Income for the whole group was up 3.8% to $18.67 billion (an awful lot in British money), with a $296 million profit compared to a loss in the same quarter a year ago. Despite Sony Music actually doing rather well, it was the electronics giant’s telly, PC and PlayStation divisions that did especially well, sending Sony’s share price up and boosting City confidence in the conglom. So, that’s all swell.